I’ve worked with many different companies in a range of industries. They come to me as they’re disappointed with the return on their marketing spend. This article reveals the 5 main reasons any business gets disappointing marketing results.
1. Badly Defined Target Market
This is the biggest marketing mistake a business can make; either not defining or poorly defining their target market or markets. The first vital step in marketing is deciding who you want to and, almost as importantly, who you don’t want to deal with.
Once you have a clear picture of your profitable markets you can then target these groups and tailor your promotion to exactly meet their needs. It is far cheaper and easier to get a 10% return from 1 000 well targeted prospects than a 1% return from 10 000 poorly targeted prospects.
It costs 7 times more to attract a new customer than to keep an existing one. However, most companies fail to market to their existing client database. 67% of clients that you lose are only lost because they have forgotten about you. Contrary to popular belief, only about 19% of your client base will leave you for a cheaper provider.
It is therefore important that you continue to market to your existing client base.
3. Marketing Material Not Targeted
There are two parts to this:
(i) Sending marketing material to the wrong prospects.
A wrong prospect would be someone who didn’t need or want or couldn’t afford to buy your product or service. Note: the easiest people surprisingly to sell to are those with no money.
The above is clearly just a waste of time and money but you’d be surprised at how many companies do it.
(ii) Not tailoring your marketing material to your prospects.
This second part is more prevalent. All the components of your marketing material (including copy, layout, text enhancements, pictures, the offer made, the channels used etc.) must all be tailored to your target market.
The better your marketing communication is matched to the client; the higher the response rate.
4. Promotional Material Looks the Same as Competitors
One of the major marketing problems companies have is that they tend to produce promotional material (flyers, brochures, letters, ads, web sites, e-mails etc.) that looks the same as all the competitors in their industry.
To be effective, promotional material must stand out from your competitors. Marketing material that looks the same as everyone else’s will just blend into the background and produce very poor results.
A sure way to achieve poor results from your marketing is to make your material look similar to that from every other company in your industry.
5. Not Doing Enough of It and/or Unrealistic Expectations
- Ever met someone who joined a breakfast networking club who was surprised that not every member shifted from their current supplier to using them immediately?
- Ever met someone who did one networking event and then claimed networking didn’t work for their business?
- Ever met someone who after 30 minutes of cold calling claimed that telemarketing wouldn’t work for their business?
I am sure you have met a number of people who have fallen into one or more of the above categories.
Any marketing channel needs some work and effort before it will start to produce results. Giving up early on a potentially successful channel is a fast route to disappointing results.
However some people do have unrealistic expectations of what can be achieved from marketing. This is particularly true with new channels such as social media where some companies expect to set up a Linked-In profile and the clients will come rolling in.
Direct mail typically achieves a response rate of 0-15%. A poorly written letter sent to a non-targeted market will most likely get a 0% return. A well written letter sent to a targeted audience with an offer carefully aimed at them will produce a good response.
Telemarketing usually achieves around a 5% response rate.
Note the word “response”. A response could be an order, a request for more information, an appointment, a sign up to your newsletter etc. It is not necessarily a sale.
The trick is to know what type of returns to expect from a marketing channel so you know if you’re under-performing as you either haven’t done it for long enough or not done it correctly or if you are getting the right return.