- December 17, 2015
- Posted by: Paul Foster
- Categories: Customer segmentation, Grow a Business, Managing business expenses, Small business technology
Technology has forever changed the small business marketing world.
Are you old enough to remember back before there was the Internet? This is when marketing and advertising budgets were spent on yellow pages, newspapers, magazines, radio, TV… and if you were really serious – direct mail.
With the technological developments and significant changes in the marketing business model, the world has changed.
Let’s explore why the old ways made sense in the old days and why they don’t make sense any more.
Mass market vs customer segment focus
The yellow pages, radio, TV and newspaper advertising was designed for everybody. If you were looking to get your message to the cold market it was all that was possible. Sure you could emphasize your differentiators, but you had to send your message to everyone in order to get to the customers you wanted to reach. This is like spraying water everywhere with the goal of getting some into a bucket. You have to spray a lot of water to get a small amount of water in the bucket.
Related article: Marketing Your Business – There’s a Hole in Your Bucket!
Advertisers get paid whether it works or not
Because there was no easy way to determine what works and what didn’t, advertisers got paid for their services whether it was effective or not. Unfortunately, this business model still exists and some businesses still pay under this model. With web based advertising methods like Facebook advertising or Google Adwords, the revenue model is a “pay per click” model. If a potential customer “clicks” on an ad and lands on your website, the software will report this action to you. The cost of Google Analytics (one way of measuring the effectiveness of the marketing funnel) is nothing.
In the old days you could have set up 15 unique phone numbers and provided a different phone number to each advertising medium to measure if the advertisement worked or not. This was not only cost prohibitive; this method would help show when the ads were ineffective. Advertisers might have trouble getting paid for campaigns that didn’t work and smart business owners would end the bad campaigns. Besides, advertisers also collect dollars from your competitors too, so they are better off keeping everyone in the dark about what works and what doesn’t.
Software and technology now exist to solve this problem. You can now purchase software that provides unique local phone numbers to place in each advertisement for a very modest sum (approximately $100 – $150 per month). Wouldn’t it be nice to restructure all your marketing spending so you only pay the advertisers when they generate a valid lead?
No motivation or ability to segment customers
Old fashioned advertisers are neither motivated nor are able to help you focus your marketing message to specific customer segments with specific needs and wants.
The ability to test and measure everything in the digital space now provides the data to make good marketing decisions.
In the old days you could still run split tests, but it was time consuming and a lot more work. You would need to create two different print marketing pieces, snail mail them to potential customers and measure which one generated more leads. (As a measurement tool, “Ask for Charlie” would be printed on one and “Ask for Jim” on the other.)
Nowadays, running A-B tests is an entire industry in the digital world. You can design your marketing material digitally almost instantly and split test it just as quick. Heck, you can even “funnel hack” your competitors website to find out what’s working for them. (We don’t recommend this, now that you have the ability to focus on your desired customer segments instead. :))
Now that you can so easily and inexpensively test and measure every aspect of your marketing efforts digitally, you can use the same tested and proven messages with your traditional advertising mediums. With the latest developments in printing, you can create customer segmented print ads now also.
The retail giant Target can use data to measure the buying habits of their existing customers and create and mail a printed flyer that is custom created for a specific mailing address! They can predict what you may want to purchase and have the offer in you mailbox before you even know you needed it!
Another new tool is the “remarketing” function for pay per click advertising. If a potential customer lands on your website but doesn’t complete a purchase, an ad for that product is targeted to that user. Have you ever searched for tires and see a lot of tire advertisements right after that? You may not like this as a customer, but the tire business can now invest their marketing dollars specifically targeting a customer who identified themselves as in need of tires.
The remarketing of a tire ad is good example to demonstrate how much the world has changed. In the old days you would have to spend thousands of dollars and guess what headline would work for your ad. When customers showed up you had no idea what ad worked or how they came to your business. Now you only have to “pay per click” to place a tire ad directly in front of a customer who you know is looking for tires. Furthermore, you can narrow the focus as much as you like in your target market right down to the Zip code, income level, age group etc… and that ad that actually works might could cost you very little (potentially less than $10).
Who knows your customers better?
Successful marketing is now about testing, measuring and gathering insights from your data. You don’t need some mysterious and expensive creative genius at the advertising agency to try and get lucky with your money. Who are the best people to run the experiments, gather the data and find the insights about what works and what doesn’t? Who knows about your most desirable customer segments, and more important, which customer segments you should say no to?
It’s you and your team.
Here’s the bottom line: The marketing world has changed. If you aren’t leveraging the existing technology in your marketing activities you are wasting money. If you and your team aren’t having regular conversations with your outside marketing resources about which customer segments to focus on, you are very likely spraying a lot of water (money) in every direction.
If you aren’t testing and measuring the return on investment for advertising and marketing, you are wasting it.
The world has changed in a good way if you take advantage of new ways of marketing.
If you have a question or comment, please reach out to us: email@example.com