Two Major Questions About Online Marketing

When it comes to online marketing there are two major questions that are on small business owners’ minds, how much and how to spend it.

First, I will address the BIG question, HOW MUCH?

As a small business owner, you have probably struggled with determining the correct marketing budget for your company. One best practice is to determine your marketing budget based on a percentage of sales (real or forecasted).

Using that method a good range is 8-15% of sales, unless you are introducing a new product or service, which could increase the budget to as much as 50%.

Determining the marketing budget is easier with an existing company because you can use historical sales data to validate any forecast sales. However, a start-up sales forecasting (projecting) requires a true “magic act”. Good luck with that, because many start-ups never reach their projected sales, even when being very conservative.

Basing your marketing budget on a percent of sales (and sticking to it) allows you to have greater control since you can vary it based on sales revenue.

So, an example is $2 million in annual sales, would require a marketing budget of $160K-$300K to spend across all your marketing efforts.

That sounds like a good plan, but the reality is always different. The SBA defines a small business as an enterprise with less than 6 million in sales and less than 100 employees (depending on industry); I wager that most of small business sales are much lower than that. My point is that EVERY marketing dollar is valuable and your marketing budget would probably lie in the 3-5% of sales range. Therefore, a better example is $1 million in annual sales, will project to $30K-$50K, so spend your budget wisely.

Now, that we have discussed, how much, let’s move on to the next question. WHERE do we spend our marketing budget?

The traditional marketing “mix” has been broadcast (television and radio), hardcopy (newspaper, magazine, yellow pages, etc.), mail (direct and email) and online (Internet). The mix is necessary because unless you have a very specialized niche, with very limited media coverage, no single medium can provide enough prospects.

Current marketing mix statistics supports 34% spent on broadcast, hardcopy gets approximately 33%, direct mail roughly 22% and online getting a low 11%.

Now for a quick reality check, a large majority of small businesses can NOT afford broadcast marketing. Consider this an inexpensive radio advertisement placement is $200 for a 60 second one-time slot, and about $2,000 for production (setup) costs. Counting repeated advertisements for a 3-4 week period, your radio ads would cost $3,000-$6,000 per week at a minimum. Television advertisement, even local cable, starts at $4,000 for a thirty second slot even in a small market. Ouch!

So, lets take our 50k marketing budget and change the mix, leave the same 54% to hardcopy and direct mail, and “get on the train” (of online marketing) before it leaves the station.

Your online marketing should include search engine marketing (free and paid), banner advertisement (on others websites), social media (Twitter, Facebook, LinkedlIn and others) and even online classified advertising (Yellow Pages, Craigslist and eBay).

By far, the best place to focus your marketing budget is in the FREE space. Make a concentrated effort to obtain and maintain high page placement on search engine result pages (Google, Bing and Yahoo) and you will see a lower impact on your overall marketing budget. You can do the needed work to make this work or hire an online marketing expert to facilitate the process. The goal is to gain first page (top ten) ranking in search engine results since over 89% of all “click-through” traffic came from top ten search engine results.

On the other hand, spending in Search Engine Marketing (also called Paid Search or PPC), deserves consideration. Paid search definitely has its place because as an advertiser, you are PAYING for first page placement. It definitely is a good fit if you have a time sensitive offer (seminar) or if you want to expedite your product awareness. Research has also proven that psychologically, people believe that a company that is willing to pay for search engine placement has more creditability. A quick tip; if you achieve top ten search engine placement for your website, immediately drop your paid search activities. After all, you have achieved your goal of first page, so why continue to pay. If you select this option, make sure you monitor your spending since you can potentially burn though your budget quickly, since PPC is impression or “click through” based.

Here is a quick business case to support an increase in your online marketing effort. It’s the least expensive form of marketing in terms of audience at a cost of $3.65 (per thousand reached). Other forms are more costly; direct mail is the high at over $487, broadcast ranges from $23-$140 and the next lowest is newspaper at approximately $64.

Finally, one more thing about search engines, that is a very obvious but usually an ignored point. People use search engines for two reasons; to research or to buy. Search engines have truly become today’s “Yellow Pages”. Think about it, when you opened the “Yellow Pages”, you were doing so because you were READY to buy, it just was a matter of which company to buy from. First page, top ten search engine placement puts your business in the spotlight of the consumer, and makes their decision easier.

Advantages of Every Door Direct Mail and Why Your Company Should Be Using This New Service

Every Door Direct Mail is a ground breaking new program by the US postal service which will allow you to mail postcards at only 14.2 cents per postcard. This program satisfies a large number of small businesses who otherwise could not afford to mail postcards

Control your delivery time with Every Door Direct Mail

EDDM gets your marketing piece in the hands of your customers when you need it to be. It’s a great program because you can control when your marketing piece hits. You prepare your mail instead of a mail house.

No fees to mail with EDDM Retail

You don’t have to pay any fees to the post office to mail your postcards which in the past made it cost prohibitive for businesses like yours to mail postcards.

Dominate the mailbox with EDDM Retail

Every Door Direct Mail is a tangible printed piece that is larger than 6.25″ tall or 11.5″ long. This means that your mail piece, as inexpensive as it is, can hit the mailboxes bigger than all of other mail piece. The postal patron will get their bills, but also your mail piece which consumes the mailbox. It will be bigger than every other piece in the mailbox.

Let your customers save your marketing piece with EDDM Retail

Many businesses look to online marketing as alternative to print advertising and direct mail. Do you think that customers save emails? With so much spam on the Internet today, it is very difficult to capture the attention of your customers in that medium. With this program, your customers can save your mail piece giving you months of return customers from that one tangible postcard.

Your competitors don’t know about EDDM Retail

This program has only been around since March of 2011. This means that the program is so new that your competitors aren’t using this program. You can get your marketing message out before your competition knows. This gives you an advantage by beating them to the clients. This won’t be like this forever, so it gives you the opportunity to mail now with little competition.

Every Door Direct Mail is a slam dunk for businesses like yours to get the printed pieces into your customers hands without a high price. We are recommending to all of the businesses we know to use the Every Door Direct Mail retail program to boost your bottom line.

Marketing Morsels – Direct Marketing Tidbits Full of Wholesome Goodness

The other day, I was digging through a box filled with tons-o-marketing stuff and came across one of my old tiny, but useful marketing tools – a postcard with some direct marketing tips that I used as a customer contact tool.

Here are some “Marketing Morsels” that I think will be useful to you:

==> A loyal customer is nine times as profitable as a disloyal customer.

==> The best way to keep tabs on your competitors is to become their customer and see how they treat you.

==> In direct response, the offer is everything. Craft an extremely potent offer before writing your ad or sales letter. Make it an offer they can’t possibly refuse. Don’t complicate your offer; keep it simple.

==> Mail your customers free “gift certificates” in the form of a postcard.

==> Remember, people do not buy your product or service; they buy the benefits of having your product or service.

==> In direct marketing, there are two rules and two rules only; Rule #1: Test everything! Rule #2: See Rule #1.

==> Call your clients and ask them why they do business with you. You’ll discover a few common reasons. Use this information in your headlines and in all your advertising.

==> Repeat your offer and your guarantee on your order form.

==> Whenever possible, give your customers an additional unexpected bonus or gift as a token of appreciation for their business.

==> There are only three ways to grow any business: (1) increase the number of clients you do business with; (2) increase the average units per sale; and (3) increase the number of times you do business with your customers.

==> Force yourself to operate under deadlines.

==> Testimonials add credibility. Use them as much as possible.

© 2010 by Craig Valine