4 January 2021|Latest Posts, Launching a business, Marketing, PR, Promotion
By Sarah Green co founder of F&G Funnel Mechanics. We love working with start-ups, the enthusiasm and passion is hard to beat. Often the first thing they share with us about their marketing plans is that they want to focus all their budget on digital marketing.
‘We want a digital marketing strategy’ they cry, ‘We must have it! We don’t really know what we mean but we want it!’
Who can blame them. Fundamentally digital marketing is awesome for many reasons. Let’s explore some of these below.
5 reasons why digital marketing is awesome
- Accessibility – the platforms make it incredibly easy to launch a campaign with minimal training.
- Affordability – you have to pay to play but if you choose the right combination of platforms it is very cost effective.
- Flexibility – so many different formats, you can test and play and monitor in real time. This gives you the flexibility to stop if something isn’t giving you a good return on investment
- Interactivity – you can keep in touch with your customers and target your ideal audience
- Measurable – so much data at your fingertips, each platform delivers more than enough data for you to track what has been successful and what has not
When our clients open with this enthusiasm, we always caution that establishing the basics first will ensure they’re designing the right campaign, that will get them the most bang for their buck. And there are 5 basics they need to understand – 3 building blocks and 2 metrics – before they can design an effective marketing approach.
Three building blocks
There are three building blocks that are ESSENTIAL elements of a marketing strategy that will drive growth for your business. At the heart of them is real evidence:
1 – purpose: who are you and why do you exist? What is your company’s mission? What problems do you uniquely solve?
2 – buyer personas: can you describe your particular perfect customer? Who are your best customers (most profitable? use your product to best effect? etc) And who is not your customer? What proof can you find to show they exist and how they think; where do they hang out and what are their hopes/dreams/fears?
3 – content strategy: with building blocks 1 & 2 in place, you can design a content strategy that speaks directly to your customers and their challenges, where they are in their buyer journey. This will guide you in creating powerful messages in the right channels to reach your customer and start selling
At this stage you may decide the path that will drive your growth is digital marketing – or more specifically, lead generation using performance marketing. So what are the two key metrics you should use to guide a paid campaign?
Two key metrics
Customer lifetime value (CLV), cost per acquisition (CPA) and the ratio between the two.
For any organisation, established or start up, these two metrics flex and achieving optimal results is an ongoing learning process.
For a start up, CLV is likely to be an educated and aspirational guess at first. How much is a customer predicted to spend with you? The sooner you can get to an actual rather than predicted figure here, the better!
For performance marketing to be effective you need to get your customer to act (click, sign up, buy etc) at a decent manageable price. Your CPA is a simple calculation:
CPA = campaign spend / # of customers
Without knowing what your CPA is you risk overspending on your marketing. You need to decide what a good CLV/CPA ratio is for your business, so that your paths to acquisition are profitable. Over time, you’ll develop a good understanding of target CPAs for your customers in different channels.
Even though there are many benefits of running with a digital marketing campaign, start-ups learn quickly that acquisition channels such as Facebook are still very expensive. You need to be clear on who your customer is, what your offer is and what drives your customer and how to reach them. It is only when you know the answers to these questions that you can choose the right marketing approach.
Digital will almost certainly will be in the mix, but it doesn’t need to be the headline. There may be other routes that will deliver the results you need. You need to manage that cost per acquisition and customer lifetime value ratio to guide what marketing strategy works for you and for a start-up striving for profitability, that’s critical.
About the author:
Sarah Green is a client director and co-founder of F&G Funnel Mechanics. She brings business development, entrepreneurship, digital marketing and strategy to the F&G party.
After starting out in exhibitions and conferences, Sarah moved into digital in 2000, before branching out as an entrepreneur. Since 2003 she has been instrumental in launching six companies and successfully selling two.
Sarah’s into all things tech, especially if there is a community building element to it. She says she loves something tricky to get her noggin thinking.
For kicks Sarah loves cycling (spin or real life), tinkering with new food ideas and juggling family and work.
We are a marketing and business growth agency. We help progressive businesses build sales & marketing funnels that drive growth. We’re on a mission to save good people from bad marketing. We are Bristol based and work throughout the UK.