The core of Performance Marketing or "How to sell really well!"
The core of Performance Marketing or "How to sell really well!"
Are you having problems performing? Don’t worry, it’s a completely normal thing, and it says nothing about your size (your company’s size, of course) — it’s just a focus point in marketing that we often overlook, or aren’t sure how to handle. Luckily, we’re here to help!
Let’s start with some basics – this is “Performance marketing 101” after all. To set up a good basis for your performance marketing efforts, you’ll first need to have great branding campaigns. Since I won’t assume you know what I’m talking about, let me clarify…
What is branding and why I should keep it on – always!
You’re a brand. Yes, you are. You have a service, or product, or some other marketable goods which you intend to sell. Now, since you have a lot of competition, naturally, you’ll need to invest in marketing to help yourself achieve that goal. So the first steps you’ll do are to set up some billboards, TV ads, radio ads, or whichever form of “old-school” activations you can afford. This isn’t a bad idea, generally speaking, but keep in mind that digital marketing activities cost way less than you’d spend on offline ones (research has shown that 55% of UK ad spend was invested in digital in 2017, and only 23% spent on TV). People often compare the two as a “cent to a dollar” ratio. With that in mind, you’ll definitely consider opening a couple of social network pages (a free activation you can do anytime, so long as you actually take care of the Pages yourself), or maybe even advertise the posts you put on those social media pages.
All of the activations I mentioned prior to this paragraph would mostly be defined as “branding marketing”. As your goal is to be heard of, and swim above the “voice” of your competitors — these efforts are necessary and they’re something we’d usually call “always-on campaigns”. Yup, even giants like Apple, Ferrari, Prada, Walmart, and many others use always-on branding campaigns. You want to be present in the world of your consumers when you need them to buy your products, but you also can’t let them forget about you when they might not have the same needs. It’s a big workload, but luckily, there are great digital and creative agencies (like us) which can help you alleviate the effort.
Okay, so we’ve settled on branding campaigns and you get the gist of what you’ll be doing there: always-on campaigns that mention your brand’s USP (unique selling proposition) and let the potential customers know you’re on the market and mean business. If we assume you have all of that already going for you, it’s time to try and cash in on all your marketing efforts. Well, soon. We first need to take care of your employee of the month — your website!
The only web that NEVER needs dust or a spider…
Here’s why I’m almost definitely sure you’re making a mistake — you’re ignoring your website. And you shouldn’t; it’s really one of the main faces of your brand and a key component in performance marketing. Websites are no longer just a brochure for users that stumble upon them, nor should they be ignored in terms of optimization (especially content-wise) and analytics.
So the next logical step (after taking care of branding) is to make sure your web is doing okay. Technology, services, and apps have grown immensely and can help you out a lot in this. Our own specialists use methods like heat-mapping, page tracking, behavioral analysis, core principles of design and aesthetics, with many other tools and software, to make sure your website is user-friendly, useful, and that it ultimately leads to achieving your main goals. Now, it’s OK if those goals aren’t sales-oriented — you could have a separate webshop for that, or just accumulate leads on your web so users can contact you “just” for a purchase or advice — but the point is that it has to be optimized and work in a way that it doesn’t “tire” your visitors, but rather guide them to what you need to say or show. So, as much as branding campaigns need to be always-on, you’ll definitely need to keep an SEO, CRO, and web optimization expert on retainer too.
“Show me the money!”
We’ve finally landed on performance marketing — yay! Let’s take a look at our checklist to see if we should really be here:
1. We’ve set up some branding activations that are “always-on”
2. We’ve fixed all the UX/UI faults of our website and optimized it well (and are still unsatisfied — which is good!)
3. We’ve set aside yet another heap of budget to cash in on our previous efforts 🙂
Cool, if all of that is done — we’re good to go!
Now we can focus on gaining profit from all our hard work. And to understand how, you’ll first need to understand what some (mostly) three-letter acronyms mean. Yup, I’m referring to CPA (cost-per-action), CRO (conversion rate optimization), ROI (return on investment), KPI (key performance indicator), ROAS (return on advertising spend), and all those other shiny words. To simplify, let’s focus on CPA, ROAS, and setting up our KPIs. Although they seem complicated, they’re actually really easy to understand and are used to make things even easier for you to track (i.e. know if your marketing efforts are working).
Let’s say you decide on creating a couple of direct-sales performance campaigns. Their goal is exclusively set to selling your product or service on a certain digital channel, and you want to make sure you’re not “bleeding” funds, but rather making a profit. The first thing you’d need to set up (with your agency, or your internal team) are the KPIs. Consider them a key point of measuring and just ask yourself what your goal should be. In our previous example, it’s direct sales, or what we call “conversions”. Keep in mind, this doesn’t have to be the only goal. Your performance campaigns might work as a team — one to generate leads for your product or service, another one that uses remarketing to aid all those indecisive customers, and a final one that incites sales. In that way, the KPIs you could set up would be the number of leads, the number of increase of leads in remarketed users, and actual conversions — each for their respective campaign.
Regarding ROAS and CPA, let’s try to explain them together! You see, in our previously mentioned campaigns, we’d check our ROAS (Return On Advertising Spend) by dividing what we spent on advertising versus what we gained in the end. Our CPA (Cost-Per-Action), on the other hand, would be the number that describes exactly how much it cost us to gain one action we invested into (for instance, generating a lead or selling something).
Easily put, if we invested $1.000 into all of our campaigns, and sold over $4.000 of our goods — our ROAS would be 4. And if we used $400 of those $1.000 to generate leads, and gained 567 new leads — our CPA would be a division of those numbers, leading us to a cost-per-action of $0.71.
I know it seems complicated at first, but it really isn’t, and it gives you a good sense of how much you need to spend in order to gain something. But, please, don’t take the usual pitfall — you cannot and should not EVER claim that every time you want a new lead, it’ll cost you 71 cents.
Nope, nein, no, ne, ingen, ei, nee, non, nu, yok.
Each campaign should run for a minimum of 3 months in order for you to get a good sense of what its true cost is, and there’s a number of things that define the cost of a campaign, including but not limited to seasonality, user behavior, brand competition, holidays, budgeting… Trust me, I could go on.
So keep in mind, if you’ve made a good campaign, it doesn’t necessarily mean the next one will be good, too — it just means you have the ability to test and play around with what you’re doing. A key point to take away is that successful performance marketing consists of many components: good and ever-present branding, a cool and easy-to-use website or webshop, optimized campaigns which you use to relay info or sell… It’s not just one thing, and if you feel that you’re underperforming, my first advice is to look at the entire funnel. Somewhere something isn’t at its best. And to reach peak performance — you’ll need to constantly improve!
If you need more help, or just want to learn more about branding, performance, web design, social media, or any of the things we went over in this blog — please feel free to contact us. We love learning too, and we’re even bigger fans of sharing what we know!