Wanting to get more out of your marketing budget is a no-brainer.
After all, we all want to get more for less. We scramble for our wallets when our favourite commodities go on sale. We attend high intensity fitness classes to get the max “burn” in the shortest possible time. We negotiate pay rises or find ways of generating passive income to increase our cashflow without increasing our workload. Therefore, it’s no surprise that we want to receive the maximum possible amount of website traffic/leads/sales etc. for the least amount of spend. In short; making your marketing budget work harder.
Is cutting the marketing budget a good idea?
As we enter 2023, businesses and households alike are being told to prepare for a recession. If you’re a business owner or marketing manager, chances are you’re facing reduced marketing budgets, however axing marketing altogether is not an option. Numerous studies have shown that turning marketing off in times of economic downturn can result in losing share of voice to a competitor, and then taking longer and requiring more spend to bounce back on the other side of a recession. The question is not “do I keep marketing switched on?” but “how do I switch up my marketing to get more out of it?”
Is digital marketing still the most cost-effective way to market?
Media buying in the digital marketing space has long been hailed for its cost effective, highly measurable, and hyper targeted features. When compared to more traditional avenues such as billboard, TVC, radio and/or print advertising (which are typically more expensive and less measurable); digital marketing is still a great way to make your marketing budget work harder.
However, the digital landscape has changed significantly in recent years. When digital marketing was new; competition was low and privacy laws weren’t equipped to cope. But 2023 is a different beast, and budgets and strategies need to adapt to remain effective online.
Here's why digital advertising is more expensive these days:
Firstly, there are simply more players advertising online than ever before (as displayed by the graph above). More competition for the same advertising space = higher cost per result.
Secondly, thanks to iOS updates and General Data Protection Regulation (GDPR) setting the bar for strict opt-in and tracking policies, businesses are unable to track people as closely online. This means digital targeting is becoming less precise. As a result, digital advertising algorithms have to work harder (aka spend more) to reach the customer most likely to buy from you.
Before you rush to hit pause on your Meta, Google, LinkedIn etc. campaigns, this doesn’t mean you should abandon the use of digital marketing. It does mean, however, that your holistic digital ecosystem needs to go further than solely media buying.
Building a community is the secret sauce to getting better results from your marketing. Here's why:
Strong communities increase customer lifetime value. In business there’s nothing wrong with preaching to the converted, as long as you’re tailoring your message to existing customers, rather than using the same message for those unfamiliar with the brand. Upselling, reminding and connecting with a loyal fanbase is always going to be a cheaper cost per acquisition than bringing a ‘cold’ lead through your sales funnel.
New product launches have a higher chance of success. When you have great brand equity, your new products/services require less of a paid push to fly off the shelf. When people inherently trust and believe in your business, they require far less convincing to try something new that you bring out. We highly recommend reading chapter 2 of James Hurman’s book ‘Future Demand’ for further information on this.
Higher return on organic content: not only do your ads typically perform better, but your organic posts are more likely to drive action. Recently we posted a recipe to a client’s Instagram featuring one of their limited edition products. This product has been around for a while, however a lot of recent efforts had been focused on growing their brand awareness, engagement and following. The result? 10 sales within an hour of this simple organic post going live. No ad spend, not even a prominent CTA. Basically, investing in building a community means your investment in organic content delivers higher returns.
When customers love your brand, they are more resilient to price increases. Consumer loyalty is crucial in a high inflation environment where margins are being squeezed, and businesses are needing to increase their prices to remain viable. Marketing is always harder when you're asking customers to pay more for your product or service than when you're offering them a great deal. Strong brand love makes this uphill battle a little easier, with greater customer retention.
6 rock solid steps to building a community for your business:
1. Know where your customers hang out
Show up where your clients or customers actually hang out. Do they use Facebook and Instagram? Or do they utilise Twitter or LinkedIn more? It is far more cost-effective and efficient to focus your energy and marketing spend on channels where your audience are most active.
2. Deeply understand your customer/client
Whether your online platforms have 200 followers or 200,000 followers; social communities thrive when you are talking to them about topics they care about in ways they resonate with. Go beyond generic customer personas and understand on a deeper level their concerns, hopes, worries and passions. Understand the language that they use, both in their own interactions and how they actually talk about your product, service or industry. Know the trends that they follow. While we don’t recommend forcing your brand voice to fit every new trend or slang word, finding fun ways to engage authentically on topical concerns is a great way to build resonance and loyalty online.
3. Dedicate budget to more top of funnel activity
Utilise paid media. It’s easy as business owners/marketers to only justify ad spend if there’s a direct ROI. The idea that running ads = immediate sales/leads is a common misconception and can result in wasted ad spend. Instead, consider investing in building a community first by incorporating other forms of campaign goals: grow your brand awareness, drive people to your profiles and get more engagement on your content. This form of paid activity is helpful on 3 counts: 1) increasing engagement on your content via paid campaigns can help your organic content perform better in the algorithm 2) gets your platforms in front of more people who look similar to your current audience, and 3) allows you to discover which targeting, messaging and creative work well for you on campaigns which are cheaper to run.
4. Build an email list
Advertising platforms and privacy regulations change frequently, however your owned data which your audience has opted into is the most powerful marketing tool in your arsenal. It’s a direct line to your most dedicated fan base, and the place where you can delve more in depth with the story about your product/service, team, community initiatives and upcoming events. Subscribers can be the first to hear about upcoming releases and receive exclusive discount codes or offers. When executed well, email marketing not only accelerates brand preference and community, but can also be your highest ROI sales channel, especially if your product is available to purchase online.
5. Be consistent
Wherever you decided to show up, ensure it’s a platform and frequency you can maintain. It’s better to not be on a platform than to start with a bang and then fizzle out. Map out a strategy and ensure you have the content and tools to enable you to execute it. Building a community online requires time, effort and persistence, but the result pays dividends. If consistency and overall strategy is outside of your expertise or capacity, investing in an agency partner is a cost-effective way to grow your community without increasing your workload. This partner should work hard to understand your business, know what you’re already doing and what is and isn’t working, and change as the market changes. Coincidentally, we know a great agency who can help with this so get in touch to learn more. (Spoiler alert: it’s us).
6. Invest in making your customer journey as frictionless as possible
Strategic social media and digital marketing are powerful tools in building a strong community and making your marketing budget work harder, however it’s not a silver bullet. These activities are only as effective as the business behind it. Before investing in social and ads, it’s critical that you have assets, infrastructure, and processes in place to make it easy for people to do business with you.
Here are a few ways to make your customer journey seamless:
Ensure your website or landing page is visually appealing, clear to understand, compelling and easy to navigate.
Prioritise great end-to-end sales, customer service and communication.
If your product is sold in bricks & mortar stores and you are driving instore sales; ensure the product is easy to find, well positioned and has appropriate offers in place.
Investing in the right systems, people, and partners to ensure you get the best return from your organic and paid activity online - here's a cheeky call to action to get in touch with us ;)
Our parting words...
Innovating and switching tactics to make your marketing budget work harder is always worthwhile, recession or no recession. Take the opportunity to redistribute marketing investment and build out channels across social media and grow your community online. Not only will this pivot assist in making your marketing budget work harder now, but will see quantum leaps forward in your other marketing efforts once the economy inevitably stabilises.
Looking for an agency partner to help get your marketing budget working harder? We'd love to chat.