How Can I Tell If My Marketing is “Working”?

Everyone who has ever done any marketing has in this situation: Having invested a considerable amount of money in a marketing campaign, you’re still waiting for the phone to ring. Perhaps a few new clients come through the door, but were they the result of your marketing efforts or not? Is there a way to tell if you got sold a bill of goods or if the effort and expense was worth it?

The ROI or “Return on Investment”

Marketing done right is most analogous to financial investing. The money that you invest in your marketing may return anything from zero to more than one hundred times your initial investment, but there is no guarantee. Just like a stock might go up or might go down, your print advertisement might be seen by the right people, or it might not; your TV commercial might convince or it might not; your YouTube video might go viral or it might go largely unnoticed.

Precisely because marketing is unpredictable is the reason that you should always be measuring your return on investment. If your financial advisor could not or would not tell you whether you had made or lost money, you take your money and invest it somewhere else. Similarly, any marketing company that does not attempt to measure the effects of their marketing is not worth working with.

Be wary of working with any digital marketing company that will not make it easy for your to calculate the ROI of their products. It often means that they do not deliver as promised.

Calculating Your Business’s Marketing ROI

The basic formula for a marketing return on investment is:

where income is defined as gain resulting from your marketing and cost is the price of the marketing campaign.

For example, if you spend $1000 on a PPC campaign and you made $3000 from clients who found you through that campaign, your return on investment would be:

In this hypothetical situation, you should invest as much money as possible in your marketing as long as you have no expectation that the market is already saturated.

Asking the Right Questions

Knowing your marketing budget without knowing your return is useless. It is impossible to tell if you are over- or under-spending on your marketing, whether your marketing is effective or ineffective, whether you should cancel it immediately or increase your investment tenfold. While it is possible to get a blurry picture from the overall revenue of the business and compare it to the marketing budget, there is no replacement for knowing your ROI.

The Importance of Analytics

Calculating your own business’s marketing return on investment is not difficult. Typically, it involves setting up campaign tracking and computer-aided data collection, but it can be as simple as asking your new clients and writing down their responses. Once you know where your clients come from and how much you’ve spend on various marketing strategies, you can respond by investing more of your budget in the most effective part of your marketing.

Most website owners are used to hearing from their digital marketing service provider about how many visitors have been to their site and little else, but actually the relevant metric is the return on investment for the site and all related marketing campaigns. A carefully crafted system of data collection and analytics will separate out the different methods for attracting new customers and measure how, when, and why these methods convert better than others. For example, if you are attracting a lot of visitors to your site with great content, but none of those visitors end up being clients, you might want to reconsider your strategy or try to convert better on those visitors with a new website.

Staying away from marketing because it is unpredictable is the same as putting your money under your mattress. It might be the surest way of keeping what you have, but you’ll never grow your portfolio or your business unless you take risks. By knowing the relevant metric (ROI), what that means, and how to calculate it, you can proceed in marketing your small business with confidence.

How Much Should I Spend on My Business’s Website?

Most small business owners do not have a lot of time to invest in learning the technology and terminology of the web. When they go to purchase or upgrade their site they find a lot of gimmicks and claims, but not a lot of facts. With no one to trust, it is hard to make an informed decision, which is why many small businesses are overspending for old technology or have a site that does not meet their business needs.

The Basic Requirements for a Modern Website

First, there are some things that all websites need. Whether you spend a few hundred dollars on a do-it-yourself template site or tens of thousands of dollars on a fashion-forward, custom site, all successful modern sites share a core set of features:

• Design that you and your potential clients will like and that reflects your business
• Technology that provides a fast-loading and stable site that works on as many devices as possible
• Written content that is professional, appropriate, and convincing
• Functionality and integration that are useful and work for your business
• Integrated analytics collection to measure the success of your site

If you are considering a site that does not have these features, or are being told that they do not matter, you might want to consider reviewing your options and changing providers.

Pricing a Website

The price of a website will vary based on how extensive, carefully designed, and customized it is. There are no exact rules to determine how much you should spend, but it should be proportionate to how much business you get from the web and how much you spend on your marketing overall.

There are several situations where the price of your site may rise:

1. Are you currently spending money to drive visitors to your site with PPC or other paid advertising? If so, it will probably be wise to make sure the site is very appealing, engaging, easy to navigate, and has a great content.
2. Do you require special professional degrees, licensing, or certifications to operate your business? Your potential clients will judge the prestige and quality of your business on your site’s appearance and content, whether that makes sense or not.
3. Does your business sell lifestyle, fashion, or aesthetic goods and services? Similarly, if your site does not convey your values and vision of beauty, your visitors cannot know whether or not to patronize your business.
4. Do you operate in an industry with a very competitive online market? Some industries have much more competitive online marketplaces, for example: law, debt consolidation, car dealerships. If you want to compete with businesses with strong, established brands or high-dollar spends on websites, you might be more successful by spending more on your website.

Most importantly, if done correctly, your website will make you money. Rather than be a drain on your business, it should drive revenue greater than its cost.

Getting the right site is not hard; however, it is necessary to find a website service provider that will not pigeonhole your business and force you into a one-size-fits-all solution.

PPC vs SEO for Small Businesses

Are you sure you know what these mean and their relative benefits and disadvantages?

SEO – Search Engine Optimization

Search Engine Optimization is the practice of maximizing the visibility of a website in “organic search,” that is, the results on Google or any search engine that are not paid advertisements, i.e. you do not pay the search engine to be shown on the page.

Billions of searches are done every year for every kind of product and service, and search engine companies, like Google and Microsoft Bing, make their money by being the place that people go to get their information, products, and services.  When search engines stop being the best, their users migrate elsewhere, and their no longer can sell advertisements along-side their organic results.

Search engines do not make money from their organic results.  It is a bait to lure users to their websites so they can sell advertisements.  Search engines want to show visitors the sites that they want to see.

Methods to achieve this goal can be categorized as either white hat or black hat.

Black Hat SEO and Its Risks

Black Hat SEO methods are those that try to exploit a known feature of a search engine algorithm to gain visibility. Early black hat techniques included including keywords thousands or millions in invisible text or paying a third party to link to your site. While there have certainly been black hat success cases, there are also dangers. Whenever a black hat technique gets too popular, search engines rewrite their algorithms to reconsider these attributes or even push websites that seem to be cheating. If you get caught buying links, plagiarizing other websites, or otherwise trying to manipulate search engines, those search engines may punish you.

White-Hat SEO Methods

These are the practices that search engines and webmasters recommend. It includes everything from making sure your website encodes information in ways that are readable to search engines, to writing quality content and creating interesting graphics. At the most basic level, good SEO practices are those that let your visitors know when they have found what they are looking for.

PPC – Pay-Per-Click Advertisements

Pay-Per-Click advertisements are links shown to visitors of other websites.  Unlike other forms of marketing, you only pay when someone visits your website via the paid link. So if no one clicks your ad, you pay no money. By displaying your ad to potential clients who are looking for a product or service that you sell and are in your area (if that is important), PPC campaigns are incredibly customizable, and with a properly run campaign, you can know with a high degree of accuracy how effective your marketing is and how much you are paying per new client.

With PPC, your goal is to maximize the clicks per dollar and convert those visits to your website into clients and sales, however the amount that you pay per click can change day to day and even hour to hour. All of the major PPC vendors employ an auction system to determine how much a click should cost for a given search. Within these dynamic pricing systems, you or your PPC campaign manager create a logical pricing system with a set rules that will select where your ad is displayed and how much you are willing to pay for a click. For example, you