Is Your Marketing Budget Money Well-Spent?

Does it seem to you that marketing is a constant drain on your cash because you are not really sure if it's working or not? Do you just cough up, hope for the best and eventually learn from your mistakes? Many businesses do take this slow and expensive route to choosing between advertising, websites, PR, direct mail, sponsorship, etc. However, finding out what doesn't work just before you run completely out of cash is a bit like running out of fuel at 10,000 ft over the Irish Sea. Speaking from experience I can say you really don't want to do that. So I have compiled some useful knowledge to help you choose the most effective ways to spend your cash on marketing and to earn a return on your investment. It will also keep you flying on the straight and level.

How Do You Choose the Best Options for Marketing Communications?

Pilots know you always need to keep a good look out and be constantly scanning the horizon for opportunities and threats. They also make regular checks on the instrument panel to pick up signs of inefficient flying. When we are high flying entrepreneurs it is very easy to get carried away admiring the view with our head in the clouds. And that was me at 10,000 feet over the Irish Sea in my ex RAF Chipmunk, enjoying the freedom of the open skies, beaming away to myself, singing out loud with not a care in the world. I had crept away from the rain-sodden, mist-enshrouded north Wales coast in visibility that was barely legal and was on my way to the Isle of Man where I knew the sun was shining. Prestatyn had never looked so attractive as I passed overhead and climbed out over the sea on a compass bearing calculated to lead me directly to Ronaldsway airfield. My plan was to refuel and then continue on over another 45 minutes worth of sea to Newtonards in Northern Ireland. Both stretches meant I would be out of sight of land for some time.

So just as I loose sight of Wales behind me and strain my eyes to the still featureless horizon ahead, I hear, and feel, that which pilot's dread most when over water - a slight cough from the engine. My smile froze, my voice choked and my hands gripped the joystick. Gulp! Maybe I imagined it, I wasn't really concentrating. But then it happened again; this time more of a shudder than a cough. Guuuuulp! Then my brain caught up and I realised I hadn't checked my instruments lately. Many possible impending disaster scenarios flooded into my panicked brain. Was it carburetor ice? Was the oil low and the engine seizing up? Was I running out of fuel? My eyes whirled over the rather limited instrument panel and I prayed that the good old fashioned 1947 style dials read true. All the vital signs were good but I needed to look outside the cockpit to check the fuel status. The fuel tanks and gauges are in the wings, small brass dials you squint down on from the front seat. The needles swing about as the aircraft moves giving you a guestimate rather than an accurate reading. There seemed plenty but I knew that the gauges had been known to stick in the past. The plane shuddered again, more violently. Calm descended over me as I recognised the wisdom of wearing my drysuit, hiring a one man life-raft and a personal locator beacon, and scaring myself witless in the simulator at Fleetwood Nautical College to learn how to survive ditching at sea. Then I did that very irrational kind of thing that is often very effective, I tapped on the glass fronts of the dials, switching everything on and off and waggled my wings. It did the trick; the engine ran smoothly all the way to the parking stand. Pheeeeeeeuuww! But how many times did I scan those dials in the remaining 25 minutes of the flight? How eagle-eyed was I looking out for other flying objects? How relieved was I when I saw land ahoy?

There are three things that will guarantee success with marketing as with flying - Planning, Expertise and Monitoring. Don't set out on any marketing activity without knowing where, how and why you are going; you must plan ahead. If you lack the knowledge and expertise to make these decisions, find someone who has got it to help you. Finally, keep checking your progress - responses and return on investment. If it's not working you need to do something different. Or you are going down!

So Which Marketing Communications Do Work?

Many clients with new and developing businesses do say they lack the knowledge and marketing expertise to choose the most effective media from the huge range available. Advertising and websites are usually the first options people splash out on. However, they can be the most expensive and least responsive, typically with a large up front cost which takes time to payback. They guzzle the gas and you can hear the engine coughing before you see any response in terms of sales.

So which does work best for your kind of customers in your sector with your product and service? Of the 3500 marketing messages we see every day, we recall only 1% when prompted. So how do you get your product noticed, your brands remembered, and find customers who will actually take steps to purchase from you? I keep a good lookout for latest trends and information on buyer behaviour and consumer likes and dislikes. I will share with you some recent research from The Institute of Direct Marketing which gives you some invaluable guidelines.

There is strong evidence that consumers are becoming more dissatisfied with some marketing approaches. (Include me with the consumers here!) The number of registrations to the Telephone Preference Service (TPS) has passed 10 million and Mailing Preference Service (MPS) registrations are likewise soaring. On average only two or three people out of every hundred respond to direct mail messages, which means 97% do not respond. So are we just wasting money on marketing? Is it just an expensive way to guarantee to irritate people?

What Does Work With Consumers and Why?
Bill Burey reported some recent findings in The IDM's Journal of Direct, Data and Digital Marketing entitled 'Consumer Motivation - Home Truths and Marketing Myths' . This interesting research project, looked at which marketing media consumers will respond to and why. Some positive, and perhaps surprising, findings included the following

• 75% of consumers do open and read direct mail
• Older people 25+ are more likely to open direct mail than younger people 18-24
• Email has become the number one preferred medium

However, there have been changes in attitudes to various media and there are aspects that consumers clearly do not like. Telemarketing intrudes into all our lives as consumers but making a phone call is one of the most direct ways to get in front of a potential customer. The research showed that in fact nearly half of people waited to hear what the call was about before hanging up. However, 38% did hang up immediately and 4% left the phone off the hook to tie up a call centre line. Telemarketing does not necessarily involve a call centre approach with badly scripted offers. A well targeted, very personalised, professionally conducted telephone approach can be a very successful way to get an audience with a client or even make a sale.

Junk Mail or Direct Mail (DM) is regarded as consumers' biggest bugbear as the BBC TV programme 'Brassed Off Britain' in June 2005 showed. Although email has become the preferred method of communication there are still a high proportion of people who will open Direct Mail. The reasons they do open it are as follows

• Brand or Company they know - 51%
• Interest in the product or service - 50%
• Clearly contains a free sample - 44%
• Local services or events - 28%
• Interesting package - 24%
• Competition - 23%
  

The majority did not mind receiving unsolicited DM from

• Local supermarkets/stores - 57%
• Local restaurants/take-aways - 45%
• Events/entertainment - 38%
• Local services/trades/shops - 37%

People are less likely to open DM because of the design, colour, attractive envelope and if it looked humorous/fun. Older people are more likely to open DM but younger people were more likely to respond to those aesthetic aspects of fun, colour and design.

The main reasons consumers do not open DM are

• Not interested in the product - 68%
• Not interested in the company - 62%
• Object to being sent Direct Mail - 58%
• Not personally addressed - 35%

Less than 15% wanted to hear about mobile phones, cars, magazines and charities, and people are really not interested in loans, credit cards, financial services and insurance. Could this be because most of the junk mail that comes through the letter box is about these things?

Email Marketing
One very positive statistic is that email is becoming the preferred method of communication. For the customer, email is a very efficient way for them to deal with receiving and assessing the relevance and importance of information that they need and want. The advantages to the marketer are many

• Customers increasingly have opted in and do want the information
• Relevant brand and product will give very high response rates
• Easy to manage system; cheap to fulfil
• Detailed reports analyse the responses and improve effectiveness
• Drives traffic to the website quickly, cheaply and easily
• Easy to target different customer profiles with offers and content

People do not read adverts, they read what interests them. So being clever, funky, or different in terms of design and layout is not enough. The word that springs to mind for me is RELEVANCE! This is a key aspect in any marketing communication whatever the media. If you send them something that is relevant to their daily lives, they will open it and read it.

Which Media Should You Use?
Research shows that consumer preferences are changing. It also shows that factors such as age of the customer have an effect. Relevance of the company and its product/service were key success factors. The answer to your choice of media is of course 'it depends', on that unique combination for your Company in your Market or sector, with your target Customer Profile and your Product/Service Proposition. You need to consider all the options.

Is Budget Spent on Marketing Experts Money Well-Spent?
The research also assessed what marketers believed that consumers thought of these media. In many instances the marketing professionals were way off landing on the target. Marketers underestimated the high level of consumer dissatisfaction with unsolicited telephone calls and mobile marketing messages, despite the high profile BT campaign to offer free TPS registration. They also underestimated consumers' understanding of TPS/MPS and data protection. Marketers are over-optimistic that people will not opt out of receiving these types of communications. They misjudged the reasons for opening DM, believing design, colour and personalisation had greater importance but failed to recognise the importance of the content being relevant.

So beware of choosing the wrong media and the wrong marketer! Both decisions could mean money poorly spent.

Which Marketing Expert Should You Use?
Clearly there are agencies out there who despite claiming to pursue Media Neutral Planning, are still favouring media that will not necessarily get the best response. There is no 'off-the-shelf, magical, one-size-fits-all' marketing communications strategy. It really does need to be carefully worked out by taking into account the detail of your Customer Profile and your Brand and Proposition. You cannot second guess what will work. If 97% of your targets do not respond to your communications, that will prove a very expensive way to learn from your mistakes.

Choosing marketing media needs to be an informed choice. If you lack marketing expertise find someone who will work with you and share some responsibility for the outcome. Plan ahead and monitor the results. Find out what works before you run out of fuel.

Aerodynamic Email Marketing

If you want to learn more about effective email marketing consider my next workshop in partnership with Kaye Nightingale, Microsoft Master Instructor. This one day workshop offers you the chance to

• Learn the secrets of grabbing your customers' attention and compelling them to take action .....with the mighty pen
• Discover the easy way to master Microsoft and other software and systems......with the mighty mouse
• Find the best system to build and manage an email database, legally and efficiently

Venue - St John's Innovation Centre, Cambridge
Date - Thursday 2nd November 2006
Time - 9.30am - 4.30pm
Cost - Concession rate £225 includes lunch and materials
Booking - visit www.theflyingmarketer.co.uk

If you have any comments, feedback or requests for future topics please email me at mary@theflyingmarketer.co.uk or call up for chat on 0845 601 7854.