How do you know if you are getting good value for your marketing dollar?
There is no doubt about it. Marketing can be expensive. Whether you are a large company spending millions or a one person company spending hundreds, the cost can seem prohibitive. But there are ways to manage your costs to ensure that you are getting good value for your dollar.
A few months ago I had a client bring me in to consult on her online advertising campaigns. Her spending had gotten out of control and she had scant evidence that her money was being put to good use. In fact it had gotten so bad that she was seriously considering retiring. It is a good thing she brought me in. Here is what happened.
My client had been depending on her long relationship with Yellow Pages. She had been advertising in the Yellow Pages for decades, but as we all know, the usage of Yellow Pages has been falling off for many years now. She needed to expand her advertising online. That's when Yellow Pages made their pitch to her. They could set her up with an online campaign and manage it for her. All she had to do was say yes and write the check.
She jumped at the chance. Yellow Pages online unit, YP.com set her up with an online campaign that included advertising on Google and placement in the YP.com directory. It was extremely simple and she didn't have to do anything. But she was also new to this area of advertising and did not know what to expect. What kind of return should she expect for her advertising dollar? How many new visitors will come to her website? How many calls could she expect? How many paying clients?
Before long YP.com was running up quite a bill. My client was paying over $7,000 per month just to advertise her law practice, and this was in addition to the thousands she spend on dead-tree Yellow Pages ad. Unfortunately for her, this extravagant new expenditure on Internet advertising was not resulting in new clients. Her practice was getting fewer and fewer referrals, fewer website visitors and fewer clients. Her new online campaign was an utter failure, and she was locked into a long term contract with no way out and little help of making it better.
I came into review her strategy and we set up several meetings with YP.com. After the first meeting it was apparent that the money was not well spent and our account manager was very defensive and often hostile. We estimated that my client was paying more than ten times as much as needed to attract visitors to her website. YP.com tried to justify the expenditures, but we could not reconcile the vast difference between what she was paying to acquire new clients and what we believed she should be paying.
It was unfortunated that she was locked into a long term contract with YP.com. She still had 7 months left to go and there was no way out. She had to keep paying that bill despite the lack of return. But she was desperate to get new clients in the door, so she hired GYST Media to start a new series of campaigns for her.
Our original estimates for her client acquisition costs turned out to be dead-on. Shortly after starting her campaigns on Google and Bing/Yahoo we had some real stats to look at. We tied her campaign to her Google Analytics and began to watch. Several things started to happen immediately.
- Website visitors were increasingly local
- Cost per visit dropped dramatically
- Client conversions went up
In short, she was spending less than half the money and getting double the traction. Her business was back on track. In fact, she was so pleased she has now expanded her business into four separate units, each with a separate website. GYST Media is running multiple campaigns against each unit, with specifically targeted keywords and content that are carefully tailored to drive the perfect clients to her new websites. The preliminary results look very promising.
Know Your Costs
The difficulty for most businesses is that they don't have adequate information to determine if they are getting good value for their money. This was the key problem with my client's relationship with YP.com. She suspected she was paying too much, but she had no information to base it upon.
At GYST Media, we deliver a complete accounting to all of our clients. They know exactly what they are spending on labor vs. advertising, and they can get all of the detailed statistics they need to determine their return on investment. It doesn't need to be complicated and it doesn't need to be confusing. If it is confusing and you can't tell how much you spend for overhead, you should immediately be suspicious. Your service provider isn't telling your something and you probably aren't getting good value for your dollar.