With all the different social media apps, marketing software, advertising platforms, and marketing agencies available; it’s easy to get pushed and pulled into trying different marketing tactics.
But we’re sure you know how easy it can be to lose money from using any one of those marketing options.
As an effort to protect you from losing precious marketing dollars and to empower you to make informed marketing decisions, we’ve put together this list of questions to consider before trying something new in marketing or when evaluating current marketing activities.
Note: For lack of a better term, we are going to use “marketing activity” as an umbrella term to describe all marketing options (social media, online ads, print ads, SEO, email, agencies, etc.).
1. What TANGIBLE results do you hope to get from this marketing activity?
With the growing sophistication of marketing tools and skill sets, it’s getting easier to quantify marketing results in a way that’s black-and-white like other aspects in business.
As you consider starting a new marketing activity, you need to think about what tangible or quantifiable results you want to get from it.
Your options for tangible results will vary depending on the purpose and type of the marketing activity.
As you think about the results you want to see, you might consider…
How many new customers the marketing activity will generate.
How many potential customers (leads) the marketing activity will generate.
How many bids you submit as a result of the marketing activity.
How much additional revenue the marketing activity will create.
How many unit sales the marketing activity will generate.
How much repeat business the marketing activity will create.
Note: The key phrases to pay attention to are “how much” and “how many” because they help ground your expectations into quantifiable and tangible results.
2. What TANGIBLE results is this marketing activity expected to deliver?
Depending on what the marketing activity is, you will need to do some research or speak with a marketing professional to determine the average results of the activity.
Keep in mind that the figures you get will only be an estimate and that the actual results will be unique to certain factors including your business, the industry, your position in the market, etc.
For example: The industry average for turf maintenance Google ads might be $70 per new customer.
But because you run a residential lawn care company in California where competition and the cost of living is high, you might experience an average result of $100 per new customer.
Once you determine the expected tangible results of the marketing activity, you can then compare it to the tangible results you hoped to get from it.
If the marketing activity isn’t expected to deliver the level of results you hoped for, then you’ll have to reevaluate whether the marketing activity is the right fit for your needs.
A conversation with a marketing professional can also help you determine whether the marketing activity under consideration will deliver the results you want to see.
3. What are your metrics for knowing if this marketing effort is working?
If your expectations and the marketing activity’s expected results are in alignment, then you can ask this question.
You should already have a good idea of what metrics you want to track if you identified the results you want to see.
As you consider other metrics in addition to the overarching result you want to achieve, think about the other results that contribute to it.
For example: If you want a marketing activity to earn you 50 new customers in 4 months, you might want to look at how many potential customers (leads) it's bringing in as well as the rate in which those leads convert into actual customers.
That way, you’ll know to reevaluate the marketing activity if after a month, it has only brought in 100 leads with a customer conversion rate of 3% – resulting in an average of 3 customers per month.
4. How much money do you HAVE to spend for this to be successful?
With most advertising platforms being “pay-to-play” (meaning, you have to spend money to show your ad), it’s important to know how much you should expect to spend for the marketing activity to be successful.
For example: We tell clients that Google ads are usually successful with budgets of AT LEAST $1,000 per month.
Anything less than that will generate mediocre results because the cost to acquire a new customer through Google is fairly high.
By identifying how much you’d have to spend for marketing activities to be successful, you can avoid wasting money on those that need more money than what your budget can support.
5. How long will this marketing activity take to generate results?
Time is an extremely underrated factor in marketing – in part because agencies often promise immediate results, and business owners fall prey to those empty promises.
On the contrary, effective marketing takes a considerable amount of time, and depending on the type of marketing activity you choose and the type of industry you’re in, it can take several months before the results can be recognized.
Some marketing activities generate faster results than others.
Google ads often generate new customers pretty quickly because they target people who are interested in and searching for the service or product.
This differs from Facebook ads that take longer to generate new customer sales because they hit people who might not even be interested in the product or service.
We keep saying it, but it really is helpful... Save time, money, and a headache by speaking with a TRUSTED marketing professional to determine how long it will take certain marketing activities to generate results.
We emphasize “trusted” because an unscrupulous marketing professional or agency will tell you any marketing activity will produce immediate results.
6. What is your preferred customer acquisition cost?
Your customer acquisition cost (CAC) is the amount of money it takes to earn a new customer through a certain marketing activity or activities.
Regardless of whether you’re considering a new marketing activity, you should know your average CAC as well as your ideal CAC.
Like customer lifetime value, your CAC can be used to make more informed marketing and sales decisions.
Though some resources will publish average CAC figures for your industry, it’s important to understand that your CAC figures will be specific to your business.
It’s helpful to allow your customer lifetime value to influence how much you are willing to spend to earn a customer.
7. What is the estimated customer acquisition cost of this marketing activity?
Though it will be an estimate at best, you can calculate an expected CAC to find out how much it might cost to earn a customer from the marketing activity.
The graphic below shows how you can calculate an expected CAC:
If the expected CAC is not in alignment with your preferred CAC, then you need to reevaluate this option as well as your expectations for CAC.
You can consult with a marketing professional to identify cheaper marketing options that might be available.
It’s important to note that several marketing activities need to be combined with others in order to convert potential customers into paying customers.
For example: A design/build landscape company might run Facebook ads to attract potential customers, then convert them using email marketing.
The combination of different marketing activities will make it a little tricky to make an isolated calculation of how much it will take to earn a customer per a marketing activity.
This is why it’s important to view marketing activities in relation to the others that might be needed in order for the activities to work.
8. What resources will this marketing activity need in addition to money?
In many cases, you’ll find that a single marketing activity will need additional marketing activities or non-monetary resources for it to run successfully.
For example: Google ads require moderate web design to create and manage the web page that potential customers will be sent to.
This means you will need someone (yourself, an employee, an agency, etc.) to not only set up the ads, but to also create and manage the web page.
Knowing what additional resources a marketing activity will need in order to be successful can prevent your company from accidentally biting off way more than it can chew.
Here are some non-monetary resources that some marketing activities require:
Company owner’s or leadership’s time
It’s better to overthink and over-question when considering what all will be involved in getting a marketing activity off the ground and running successfully.
9. Is this a sustainable marketing activity?
Once you’ve determined what additional resources will be needed to make this marketing activity successful, you can decide on whether your company can sustain it long enough to achieve the desired results.
For example: You might find that your administrative staff will need to spend 5-10 hours a week writing blogs to improve SEO and determine that their time would be better spent fielding client calls to improve customer loyalty.
Identifying whether your company can sustain a certain marketing activity is critical because it can protect your company from wasting time and money on failed marketing initiatives.
Please note that if you find it difficult to sustain certain marketing activities because they require too much time from your team, you may need to look into hiring a marketing professional or agency.
Though it is an investment, a marketing professional can protect you, your company leadership, and your staff from having to spend time on marketing activities.
10. Is this marketing activity compatible with YOUR type of business?
Some marketing activities fit businesses better than others.
For example: A commercial landscaping company that provides landscape maintenance to corporate buildings and medical campuses will not find much success in running Facebook ads for their services because Facebook cannot target property managers of commercial properties.
With a little research on the marketing activity, you can determine if it makes sense for your type of business.
You can also get a quick opinion from a marketing professional about whether the marketing activity makes sense for your business.
11. What type of customer is this marketing activity likely to attract?
Not all marketing activities generate the same type of customers, so it’s important to evaluate marketing activities in terms of what customers they will earn you by asking:
What stage in the buying cycle will the customers be in?
How much revenue will the average customer generate?
How profitable will the average customer be?
What services or products will the customers need?
Are the potential customers exclusive to your company?
Will the customers be bargain-hunters?
Will the customers demand a discount?
Where will the customers be located?
Answering these questions will help you avoid spending money on empty leads or cheap customers like the ones businesses get when using lead generation companies like Angie’s List/Home Advisor, Zillow, Groupon, and GrubHub.
Answering these questions will also help you determine whether the marketing activity fits your strategic needs.
For example: If your floor covering company is looking for high-revenue jobs, then running an ad in a local magazine that targets neighborhoods with average lot sizes of 1,200 sq. ft. won’t fit your strategic marketing needs.
12. Does this marketing activity meet your strategic needs?
As mentioned in the previous section, deciding whether a marketing activity meets your strategic needs is critical.
In order to decide whether a marketing activity supports your strategic needs, you’ll need to know what your strategic needs are.
You can get a better sense of your strategic needs by answering the following questions:
How many new customers do we need to earn over [insert amount of time]?
How much revenue do we need to earn over [insert amount of time]?
What profit margin do we need to achieve?
What does our ideal customer look like?
What service or product do we need to sell?
What is our ideal customer acquisition cost?
What is our average customer lifetime value?
How much can we afford to spend on marketing?
What is the level of competition in our area?
It will take a little time to answer these questions, but this exercise will be extremely helpful in determining which marketing activities make sense for your company in the short-term and the long-term.
Take Time to Ask These Questions
Now that you’re armed with these questions, you need to ask them every time you consider adding a new marketing activity.
We also encourage you to use these questions to evaluate your current marketing activities.
Yes, it might take you some hours to thoroughly answer the list of questions, but doing so will protect you from losing precious marketing dollars and empower you to make informed marketing decisions.