Why a great marketing idea can be a big mistake

Many small businesses fall into the trap of believing that one good marketing is going to get them to sales heaven. But when it doesn’t work, they feel they’ve fingers have been burnt and marketing is usually the punching bag.

I’m going to get into a lot of trouble for telling you this next story, but here we go….a family member approached me some time ago with an idea his workplace had for marketing their business.

“We want to send out these really cool emails with videos in them. Everybody at work is so impressed. Its better than YouTube. We’ve got a pretty big database of a couple of hundred email addresses and its only going to cost ten thousand dollars.”

I asked him how sending a video email creates a sale. The response – “ Umm…I dunno”.

Arrgghh! Sometimes, I wish I could be the Gordon Ramsay of marketing.

I’m not saying that small business owners don’t have good ideas. Far from it. I believe that most are incredibly savvy and have too many great ideas.

What I am saying is that to make your marketing work, plan properly and include the following in your considerations:

1. Is the consumer ready for you?
Take a look at the general decision making process a person will go through before making a purchase below.

Problem recognition -> information search -> evaluation of alternatives -> purchase decision -> post purchase evaluation

Your marketing efforts should facilitate a prospect’s progress through each step to optimize the chances of a sale.

So when most small business owners say a promotional activity didn’t work, one reason maybe because it did the wrong thing at the wrong stage in the process.

Let me explain with a simple train of thought from the mindset of a typical consumer – I didn’t need your product before, so just because you sent me a video email doesn’t mean I’m going to buy from you now. I may however, buy from you when I find that I do need a product like yours, assuming that I’m thinking of you at the time.

2. Is there support?
Cool idea or not, in isolation it’s about as useful as shooting in the dark and hoping that you hit your target.
Successful marketing is often based on a series of integrated activities rather than just one big initiative. One good reason for this is to ensure that you guide a prospect through the decision making process with continued engagement, staying at the top of mind when they finally do decide to purchase. In this respect, the more you engage with a prospect, the higher your likelihood of getting a sale.

If you know what your activity is trying to achieve and in what part of the decision making process it facilitates, then you can create support for it (such as following up leads via telephone) to increase your chances of a sale.

3. Is this the best way ?
Look at the characteristics of your current and prospective customers. How do they live and work day to day?

Nowadays with the increasing use of technology, people are consuming information from a myriad of sources including broadcast, print and digital media. As such no one type of communication holds the same level of power and influence like it used to. Known as media fragmentation, this means it is often worthwhile using a combination of ways to communicate and promote your business.

4. How much does it cost per sale?
To answer this question, you first need to calculate your average cost per sale for your marketing. Looking at the basic equation below, you can quickly determine if you are likely to make money for the effort or not.

Av. Cost per sale = cost of marketing activity ÷ estimated likely no. of sales

Lets take a closer look at the video email example:
- cost for video emails is $10,000
- database of 200 recipients
- Assume sales strike rate is 50% (a very generous assumption)
- Average open rate for email marketing is 20% (according to Vision6)

Based on the average open rate for email marketing, we can expect 40 people to open the video email. Out of these people we assume that 20 will become customers. Thus, the average cost per sale was $500.

For most small businesses, this cost per sale is far too high. As you can see, whilst the idea wasn’t a bad one, its probably not worth pursuing until they can significantly increase their database to lower this average cost.

Now you can see why sometimes what appears to be a great marketing idea can end up being a big mistake. Avoid the pitfalls through research and planning.

This article is brought to you by Australian Business Marketing Services, giving you no nonsense, results driven marketing at a price that you can afford. Contact us today on 1800 505 529 or via email for assistance with your marketing needs.

By Vanessa Tsui