Go! Set! Ready?… No

September 16, 2010 By

Thank you Seth Godin for clarifying a concept I’ve tried explaining to others for years (you can read all of his post here):

“The mistake we often make: thinking that the problem is that there’s not enough people starting the process, not enough people being exposed to your offer. In fact, it’s almost always a problem with how efficient the funnel is and how likely it is that loyal customers tell their friends. If you take care of those two elements, you have a lot more to invest in promotion, and delightfully, the promotion is more effective as well.”

This is why constant measuring, testing, and improving your funnel is so important. Once you know your funnel is better than the competitions and efficient (not perfect – just efficient) then pour the gas on your promotion and advertising that drops people into your funnel.

Which funnel is the easiest to begin measuring and improving in your business? Which funnel also happens to be your best return on investment and has the longest shelf life? You guessed it – your website.

Here’s real life application. At a recent conference I attended (you should go next year) I listened to a Kayak.com employee tell the audience that roughly 8% of all site visitors are redirected to a slightly different version of their site. Maybe one button is a little larger than normal, or a font is changed, etc. This means that 8% of their customers are unknowing guinea pigs that allow them to test and measure a single concept, and all of this is designed to give them constant feedback on how to improve their funnel.

What could you be testing right now?

Filed Under: Marketing Systems Tagged With: , ,

Time to Limit Your Reach & Raise Your ROI

September 1, 2010 By

The most direct definition I could find for the word overreach is “to reach above or beyond.” I admit it doesn’t sound like a bad thing at first, and in some things – like negotiating – it may not be. However, when it comes to determining the advertising channels you use to market your company or product – overreaching is almost always a bad thing. The reason is because you are paying for everything “above and beyond” your target market.

Let me take a step back. In advertising there are two very important concepts to understand. The first is reach – how many people will be exposed to your message (note: this is NOT the same number as those who will even be aware of your message – let alone act on it). The second is frequency – how often will they hear that message over a given period of time. Here is my philosophy: limit your reach to include your target audience only and raise the frequency as high as possible using as many different methods as are relevant to your target audience.

Why? Because your target audience is just like every audience – they’re busy and they don’t care about you as much as you care about them (at least, not yet). You need the frequency to make your message scratch the surface of their psyche. An old rule of thumb is that it takes a consumer an average of 6 to 7 exposures to a message before they are even aware of it – and many more before the message actually sticks. If you waste (and that is truly what you’re doing) your marketing dollars by going with a high reach approach (are you sure all those people want or can afford your product?) then you probably won’t have enough money to make the frequency high enough that they will even faintly remember you.

Does the internet and social media change this ideal ratio of reach and frequency? Not at all – it just lets you target better… and make your frequency more personal and cost effective. More on that later.

PS. If the product your company makes is truly something that everyone needs, wants, and could reasonably afford to buy (like gum or laundry detergent) - then you can tone down this post - but just a bit.

Filed Under: Marketing Systems, Media Buying Tagged With: , , , ,