When it comes down to it, advertising is simply the quickest way to communicate to today’s customers. Effective advertising puts you in front of your customers whether they were looking for you or not. Combined with the right offer to get attention and drive consumers toward taking action, it’s the fastest way to create a windfall of revenue for a company.
With that being said, as a business owner, you need to assess whether you have all the steps in place to actually start advertising. As great as the upside is to advertising, not all businesses are in place where it makes sense for them to do it.
Today we’ll highlight the top three things that every business owner should know before they start spending on advertising.
Have the Right Processes in Place
The first step before you advertise is to make sure your business has processes in place that allow for you to effectively handle the leads that your advertising will bring you. The best marketers in the world driving the highest quality traffic won’t help your business if the process handling customers hasn’t been optimized to make sure they convert.
One example of this is an adequate sales structure.
Do you have a sales person or sales team that can properly handle the leads generated from advertising? Will they get emails with value add content on a regular basis so that you’re constantly in front of the customer? Will they be followed up with multiple times if they’re not available by phone that same day?
Without the proper process in place, the leads you receive will not be managed properly and you risk wasting all of the time, money, and energy that it took to acquire that lead.
Another thing to look at is whether you have an attractive offer for your customer.
If you don’t have offers that give your customers a reason to take action now and do business with you other than your insistence that they should, then you’ll have a tough time moving them through your sales cycle. This means that how you position what it is you’re selling needs to be considered before you spend money on promoting it. Every day there are GREAT products that are overlooked and outsold by good products, simply because the good product was made out to look more appealing. Even sliced bread needs a good offer.
Know Your Numbers
The second step in assessing if you are ready to advertise is to know your numbers. Knowing your number means that you are aware of all the following data for your business:
How much does one customer spend with you over the course of a few years? (long term value)
How much is it costing you now to acquire one customer?
Let’s focus in on the customer long term value. How do you profit off of one customer over the time they do business with you? This knowledge is key in order to get a clear understanding of what it would entail to actually see profit from advertising. Once you understand what one customer is worth, then you can set clear targets on the cost of acquiring new customers. Without this information, you’ll never know exactly how profitable or costly your advertising really is.
Loss Leader vs Long Term Value
Assuming you know your numbers, you can use a loss leader to build up your client base and grow your ecosystem of customers.
If you’re not familiar with the concept, a loss leader is a promotion that you lose money on to acquire the customer with the understanding that you’ll make money in the long term.
A great example of this is monthly subscriptions businesses. Oftentimes websites like a music streaming site will pay for advertising to attract customers knowing that they won’t make a profit in their first few months. If they charge $10 per month and they know that customers stay with them for an average of 14 months, then they’d be comfortable paying up to $140 per acquisition to build up their service. That means if they spent $2000 to get an influencer to promote their service and acquire 15 new paying customers from it, then that campaign would be positive ROI. If they earned 29 paying customers from that influencer’s audience then they’d actually double their money. This is how a loss leader works and it can be extremely profitable, but you have to know your numbers.
As an owner, you have to assess if your business is at a point where it could absorb this initial cost in return for longterm success.
Have a Place to Send Your Customers
The final step is to make sure you have an adequate place to send your customers once you have their attention. What this means is do you have a functional landing page or website that you are able to send your customer with a high rate of conversion?
What’s the point of doing all the hard work of the first two steps and lose the customer in the final step?
A good landing page will direct your customers to take specific actions when they get to your website. The purpose of the page should be to have a high percentage of getting them to do what you want them to do on that page. This means if you want them to download your e-book, the page should be funneling them towards that option. The download button with the opt-in fields should show as soon as they load the page. The messaging on the page should be in line with the ad that they saw to get there. The more that you do to make sure that the landing page is set up to convert, the more effective that your ad dollars are going to be for you.
For example, let’s say you own a professional painting business and your services include a variety of indoor and outdoor options. If you send your customers to a page in which they have to choose what type of job they need done, where they’re located, how big of an area needs to be painted, and then their contact information…you’re setting yourself up to get very few leads.
With a different page that clearly shows a call to action and has only a few fields to fill in such as name, phone number, and email you’re guaranteed to get more results.
Often times the page in the second example will convert at a much better rate than the first page, even the design isn’t as beautiful. The reason is that it’s simple and there’s less friction in the process. Attention span is shorter every decade and frankly, the fewer fields that a consumer has to fill in to submit their information the more likely the are to do it.
There’s so much more that goes into building a successful landing page and if you’re looking for an example of a high converting page you can always take a look at one of ours.
The key, as a business owner is to create a process for your customer that’s as simple as possible and gives you the highest chance of getting the business, whether that’s in person, over the phone, or online. Don’t miss this vital step if you ever plan to generate a lead or sell a product online.
So in summary, the above are key items to have in mind before you spend on advertising. As a business owner, you need to make sure you have the right processes in place with your business, including an adequate sales process, and proven products. Always be aware of your business numbers including your customer’s long term value and how much it costs to acquire a customer. Lastly, it is important to have a functional landing page or website in place to send your customers that’s specifically geared towards getting them to take action.
If you’d like to learn more about how to advertise effectively, join us for our Marketing Mastermind HERE.
For more questions don’t hesitate to contact us at 10XProductions@grantcardone.com.