It used to be easy to judge how successful a marketing campaign was. You’d tally your sales, count your Clios, Effies, and Drum Awards, and pat yourself on the back or start looking for a new agency. But the internet, smartphones, and social media have changed the way we do business, and they should be changing the way you approach marketing.
Consumers are coming to expect more personalized marketing experiences. They want to build relationships with brands, and to feel like they’re being treated as individuals whose needs are considered and catered to. They don’t want to be viewed as wallets, numbers, or automatons. Campaigns that offer consumers a greater sense of connection to products and brands and provide a more convenient user experience will be the ones that succeed in the new digital reality.
Market For, Not To, Your Customers
It’s a mistake to view your conversion rate simply in terms of clicks and sales. Marketing expert John Hall defines a recent sea-change in successful campaigns: the shift from “me” marketing to “you” marketing. He defines the shift as taking the emphasis off your company or product and placing it on the consumer. Hall concludes that companies will benefit by focusing on the ways in which they can help their customers, and draw in prospective consumers when they are ready to make purchases, instead of pushing a message focused on maximizing immediate sales.
Pushing hard for sales doesn’t always maximize success for brands. This McKinsey study finds that even a small increase in customer retention rates can have huge impacts on profits and sales. Further studies from the Harvard Business Review have shown that acquiring a new customer is 5-25 times more expensive than retaining an old one, and that a 5% increase in retention can lead to profit increases of up to 95%!
How Valuable Is Your Customer?
The formula for calculating Customer Lifetime Value (CLV) is simple: add up the total profit a customer brings your business over a lifetime, then subtract the amount of money you spent to attract their business. Your calculations can be historic or predictive, but keeping an eye on these figures, and optimizing CLV is tremendously important. Retaining existing customers is a far more profitable business model than consistently attracting new business, and reverse engineering your strategies to build CLV is incredibly beneficial. Tracking CLV will tell you which messages are resonating with your clients, how popular different products and services are, and areas that need to improve. As subscription services gain in popularity, and technology makes it incredibly easy to replenish frequently used products, we expect CLV to become an increasingly accurate predictor of success.
To get more value from your customers, provide more value to them. Segment your marketing lists to ensure you’re approaching customers with offers and information that meets their wants and needs, instead of spamming them with countless offers that go straight to their junk mail folder. Make sure that you offer thank yous, special deals, and coupons to keep customers coming back. Offer incentives to follow your brand on social, and make sure that you give quality content and special promotions to the consumers who engage with your brand. Create a loyalty program that actually provides significant rewards to repeat customers. And ensure that all friction is removed from the purchase process. One of the keys to building value is valuing the time and money of the people who will ultimately decide whether your business succeeds or fails!
Convert Conversion Rates Into Relationships
It’s a mistake to look at your conversion rate simply in terms of sales. If building a relationship with consumers and maximizing their value over a lifetime is the goal, any campaign that can provide you with contact, communication, trust, and information needs to be deemed a success. The Forbes Council has identified the following as key trends driving success in 2019: transparency, quality over quantity in marketing content, and customers becoming empowered as brand ambassadors.
Transparency and quality content are both ways you can let your audience know that you value their needs as well as your own. If your newsletters, promotions, and emails take advantage of data to offer personalized deals and helpful information, you are already on the way to building relationships that will almost certainly lead to sales.
It may be a controversial position, but as marketers, we’re steadfastly in favour of increasing sales. Sales are wonderful, but don’t forget that every newsletter subscription, completed survey, and follow on social media has value as well. As trust in companies declines and product information proliferates, recommendations from friends and other social media users are becoming an increasingly valuable currency. Instead of hammering the audience with slogans and sales-talk, try to create content that offers something useful in return for the consumer’s attention. Studies have shown that 5% of all branded content earns 90% of user engagement on social media. Take the time to ensure that your messages engage and inform your audience, and make sure that your partners in marketing are giving you all the data you need to determine whether you’re succeeding.
Crossing Channels No Longer Means Long, Cold Swims
Starbucks and McDonald’s are two current examples of brands that are using cross-channel marketing to have frequent and meaningful interactions with their customers. Both companies have launched cutting edge apps that remove a great deal of friction from transactions, allowing them to accumulate and analyze vast amounts of customer data and build relationships through personalized promotions and loyalty programs. It’s important that brands maintain a consistent experience and quality of service across smartphones, computers, apps, brick and mortar stores, and media campaigns. Online retailers are moving into brick and mortar, and traditional retailers are building eCommerce channels. Offering your customers the ability to have their cake and eat it too, and access the same promotions and information across all sales channels is a must.
It’s Time To Re-define Marketing Success
Sales are still the ultimate goal of every marketing campaign. They’re manna from heaven for every company out there. But as we learn to track, analyze, and use all of the data the digital revolution has provided us with, we are gaining the ability to study marketing campaigns on a molecular level. And today’s sale could’ve been the result of any number of factors acting independently or in concert, rather than the last ad your company ran. If you really want to know how wisely your marketing dollars are being spent, it’s time for a new definition of marketing effectiveness.