Every small business should have a marketing control. What’s a marketing control? It is a reproducible means of gathering new customers where the investment and the return it produces are both known. It works constantly over time. It is reliable and always produces the same result, give or take.

Then the fun starts. You try to beat the control through testing. What do I mean by testing? Well, you can change the headline, the copy, the pictures…anything. And then run it. If you get better results, you have a new control. If not, your original control survives to fight another day.

It’s Darwinian. It’s survival of the fittest marketing approach.

A control is specific to the route-to-market. So you might have one for advertising in Magazine X, one for your web sign-up page, one for your direct mail (direct mail is not dead by the way), one for your script for cold-calling.

But of course to have a control you need to be able to measure response. As I have stated many times before without yet managing to bore myself, if you’re spending marketing money and not measuring response, you’re crazy. All marketing messages should have a call to action – what exactly are you asking the potential customer to do? And then you measure how many of them actually do it and in time become customers. Then you know your return-on-investment.

The control experiment comes from science – it shows what happens if you do nothing (i.e. run the same advert as last time). There’s a lot more rigour can be applied to marketing than usually is.

Beware the marketer who cannot offer measurable return-on-investment.

You will have controls already, maybe without realising it. It might be your web sign-up page, or your networking venue/frequency/technique. Pick one of them and establish your return-on-investment.

Then make a change. For example, change the bribe you offer people for signing up on your website. Track what this does to the percentage of unique visitors who actually sign-up. Then assume you have the same conversion rate of new sign-ups to customers (you can measure this more accurately in time). You now have your ROI.  Better or worse than before? Keep going – do it again, and again. Pretty soon you’ll get to a stage where improvements are harder and harder to come by. This is good, as you’re getting close to the optimum approach.

Marketing is often done really badly, if at all. It takes very little to be more effective in your marketing than the bulk of other people in your space. And the rewards go far beyond mere survival.

Just do it. As somebody says in their (very effective) marketing.

I’ve often wondered about this, so I bought some. A list of 1300 senior business people, in organisations of up to 100 people, in various industry sectors, across the NorthWest. With email addresses. These people are my target market segment, for part of my business.

I emailed them. I was marketing my Business Growth Workshop. I tried to write some attractive copy. I sent one email. I sent another the next week repeating the offer, and offering a subscription to this blog and also asking if they’d like a free consultation with me. I then sent a third email that was just like the second.

Buying the list and writing the emails took between one and two hours. The list cost £350 plus vat.

So, what happened?

First the bad…

My Mother says bad news travels fast. So it seems. Immediately upon sending email 1 I had an unpleasant email conversation with a rude and offensive solicitor. He asked me lots of questions and asked for references. I answered his questions and provided references. He then decided to go directly to my friend and guest speaker, Ian Brodie. Ian, whom I had kept in the loop with this guy’s nasty emails, told him were to get off. He didn’t like that.

I had another initially unpleasant conversation with a man who assumed I was unethical even although by his own admission I appeared legitimate. After a few emails we ended up agreeing that we were both great people and we parted as friends.

I had another reply from someone who suggested I “get a proper job and stop being a bullsh*t consultant.” I checked him out. Goodness me, he knows what he’s talking about. He clearly has had a lot of advice from bullsh*t consultants.

And then the good…

Well, I got about 9 signups to Pearls. History would say one of them will buy within a year.

I got about 7 downloads of my Small Business Healthcheck. Again, this will lead to about one sale within the next year.

I got an email from an MD of an international company who asked for more info. I had a nice call with her and we’ll see what happens. I got a call from another MD of an international company. I have since met him and we have planned to do a pilot coaching programme, and, if he likes it, we’ll roll it out to some of his team. And then maybe the world. Who knows?

Oh, and I got two delegates for the workshop as well.

I got an average 18% open rate, say about 230 opens per email. I was surprised that this was so high. Maybe my copywriting is getting better. They say you should concentrate on the headline, or in this case, the email title. I did.

So, what is my return-on-investment?

Well, it’s £1,700 immediately and a high probability of approximately £3,000 to £5,000 over the next 6 months. There will be more after that, but I’m not going to bother to estimate it. So that’s a total return of roughly £5,700, conservatively.  I will review this properly at 6 months and 12 months.

And there’s still more value to be had from the list…53 people looked at the workshop microsite but didn’t buy…that doesn’t mean they’re not interested…they opened the email, went to the site and spent an average of 3 minutes there. They’re clearly interested. It’s just that they weren’t ready to buy, for whatever reason. But their time will come.

For a first attempt at using cold data I’d say it was a resounding success.

Marketing? Great stuff.

This week’s Pearl of Leadership Wisdom is on Tactical Marketing.
“Advertising is the life of trade.” – Calvin Coolidge

After last week’s little detour into reflection, which a lot of people seemed to like, it’s back to marketing.

Two weeks ago, in the Pearl on Strategic Marketing, I discussed the need to know your target market segments, your value proposition and why you’re different – your unique selling proposition. I had also used the well-known quote from Lord Leverhulme about not knowing which half of his advertising spend is wasted, and I suggested that this fate can now often be avoided.

So many options…
There are dozens of ways to get to your target market segments. It’s mind numbing: you can use the web, traditional advertising, search engine optimisation, pay-per-click, direct mail, flyers, inserts in publications, piggy-backing, joint-venture marketing, agents, distributors, affiliates, radio, TV, email, directories, catalogues, networking…

Three common approaches…all wrong…
Most firms use too many of these routes to market. Or none at all. Or, if they are focused on one method and one method only, it’s the wrong one (yes, for the small firm I am talking about most networking).

The vital few…
But there’s probably only two or three routes to market that are really effective for your firm.

And the way to find out which they are is to use your business judgement, and then test, test, and test again.

How testing…
Tactical marketing is like any other investment. You need to measure a return-on-investment. Marketing as a discipline, and marketing companies as an service industry, seem to be immune from this stricture. And most managers, myself included, have been complicit in this waste of money.

If you spend £200 or £20,000 reaching out to your customers, you are nuts if you cannot measure your return. It’s reckless. More than reckless, it’s a wasted opportunity. Not only did you spend money poorly, but you almost certainly missed the upside from getting it right. A double loss.

And then what…?
Disillusion. Followed by reversion to one of the failed strategies above: do everything; do nothing; do (the wrong kind of) networking.

The Siren call…
If you put an advert in Flower Arranging Monthly, tell the reader what you want him or her to do. Tell them. People like being told what to do. It’s good for them. Tell them to call this number, visit this website, fill in the form. To make contact, in some way. It’s called a “call-to-action.” With an inducement – money off, special report on growing orchids in the snow, free newsletter. Whatever the reader will value. Give them a code to quote when they contact you. Then you can track sales and profit, relative to the cost of the advert. Simply. Not new. But seldom done well.

Your marketing has failed a drugs test…good!
The internet allows you to put all this on steroids. All of your conventional marketing can lead to landing pages – small, single page websites. They come in three flavours: list building, information and sales pages – but more of that some other time.

There is little the internet allows you to do that has not always been possible, but the acceleration is stunning. It’s lightening fast. You can do a Google Adwords campaign for next to nothing and get almost instant feedback on the business generated.

For example – you pay 75p for every click on your Google advert for your seminar. You’ve set a budget of £100 for this marketing experiment. Your budget is spent when 133 people click through to your sales landing page. Of those, 3 register and pay for the seminar (less than one in forty).

Total cost to acquire a customer – £33. If your profit per head for the seminar is more than £33, you’re in business. If not, you’re not. Until you take some management action and re-run the marketing experiment.

Simple. Powerful. Rapid. Scalable. Repeatable. Profitable.

How great are you…?
Do you have a great product or service? I’m sure you do. But it doesn’t matter how good it is if no one knows about it.

I said two weeks ago that more than half of British small business people do not really understand marketing. I stick to this. It’s seen as a luxury, a cost, an expense. This is madness. Marketing is for everyone with a market – whether they be large or small;  private, public or third sector.

Test yourself…
Ask yourself a question: “Do I have two or three proven, affordable ways to generate new, profitable business which don’t require stupid amounts of my time and deliver a positive return-on-investment?”

If your answer is “yes” – you are in an elite.

If your answer is “no”, then I’m afraid you have one of the three main afflictions of the small business person. Side effects include anxiety, tiredness and fear of the future. It is always disabling and often fatal.
Mark