As a CFO, COO and President, I have spent millions of dollars over the years trying to get people to respond to marketing campaigns, and have made my share of costly mistakes. The lessons I learned are appropriate whether an organization sells products or is looking for donations.
Here are seven valuable lessons that can have a huge impact on your top line:
1) You can’t just throw money at a problem and expect results
More money in marketing isn’t the answer to solving top line revenue problems. A company I helped found competed with doctors for cosmetic procedures. A doctor’s wife or office manager would see our ads in the paper or on TV and convince the doctor to throw a chuck of money into advertising. The doctor got little results and soon gave up on advertising; while our phone rang with new prospects saying they saw our ad (we were not where they thought they saw us). Therefore, the doctor’s ad became our ad. The remaining marketing sins will explain why.
2) If there is no plan, then plan to fail
The doctor had no plan. He was simply copying what we were doing or taking the easiest route to spend his budget or following advice from a friend or associate. While we had a specific plan for each month’s marketing campaigns and knew the kinds of results we should expect. We also were constantly planning and trying new tests to see what we could change to get better results than our base campaigns. The doctor’s money was wasted or worse yet it helped us and gave him little in return.
3) Money is wasted by not capturing all your leads
We knew when the phones would start ringing from our marketing campaigns and made sure we had a way to capture the calls and get them to a trained and scripted sales person. On the other hand, the doctor’s calls came into their general phone lines and the busy, overworked staff either did not answer the sudden burst of calls, or had no idea how to respond to calls asking for more information.
4) Money is wasted by not following up with leads multiple times
Every lead that came to us was captured and put into a follow up process (in our Customer Resource Management System) because we knew people buy when they are ready to buy, not necessarily when we are ready to sell. We were in front of them periodically, even years later when they finally decided it was time to buy what we had to sell.
5) Results drop when there is no script for calls coming in
We scripted each call response because we knew the factors affecting a prospects decision to buy. (It’s no different than donors with a passion for your mission). We reduced their reluctance by asking permission to ask questions and lead them through a process that led to a logical (and emotional) choice. I could tell when salespeople left the script because I saw immediate evidence in their declining results.
6) Do you know your key performance indicators
Because I knew the cost per lead and cost per sale for each of our marketing campaigns and close rates for my salespeople I could do a lot of very positive things. I could do a monthly and even quarterly marketing mix plan and know with amazing accuracy what my results would be. I could immediately respond with help to salespeople who began to have lagging results. All these gave our organization a significant competitive advantage. I also knew my TV marketing campaigns gave my other campaigns support and better results and that prospects generally need to see something 5 to 8 times before deciding to respond in the first place.
7) Knowing the lifetime value of your client/ donor is key
Because I knew how much on average a client would spend over time, I knew how much I could spend on marketing and even if I could lose money up front on a campaign because I knew additional revenue would be coming in the future from our clients.
The bottom line to successful marketing results: Plan, measure, test, learn and do it over again and again!
Tom Noon is Newton Media’s CFO. He started his career in a Big 4 CPA firm as Manager and has over 35 years of financial management, strategic planning, operations management and project development experience with start up organizations to organizations with over $250 million in sales in a wide range of industries including media, publishing, franchising, retail, internet and software development.