How Can You Acquire More Customers… With Less Budget?
This is the exact challenge facing marketers right now. And it is just that – a challenge…. but it is achievable.
It requires a shift in mindset amongst marketers to move away from the “see customer, get customer” approach that has been seen in years gone by.
Marketers must become savvier about where and when they invest their media budgets as well as how they build their channel mix. Additionally, it’s never been more important to understand the true value of the money they spend – which means accurate attribution has never been more important.
What’s caused this shift?
Over the course of the last few years there have been several factors which have ultimately led to where we are today:
- Reduced marketing budgets due to economic pressures
- The need to find truly cost-effective incremental growth from marketing activity
- The need to be able to justify marketing spend more than ever before
While the first point is self-explanatory, we’ll take a deeper dive in to points two and three to understand what’s caused this shift and what marketers can do in order to meet this challenge head on.
Driving True Cost-Effective Incrementality
Firstly, what do we mean by this? Well, it’s the acquisition of new customers and revenue growth at the best possible cost to the business.
Over recent years the cost of marketing has continued to increase and a lot of this is down to the over-saturation of marketing activity at the bottom of the funnel. Increased competition leads to increased CPCs, which in turn leads to increased CPAs. This isn’t a sustainable model in today’s marketing climate.
There is a need to identify how to target customers earlier in the buying journey and effectively funnel them through their conversion process. This brings with it its own challenges – but we’ll get to them in a bit.
The first step in this process is for marketers to take a step back and ask themselves “what are my customers looking for when they first start this journey?”.
By answering this question we can understand the content we need in order to get in front of customers early.
This is where the usage of pre-transactional content becomes imperative. Answering the questions that potential customers have at the start of their journey can lead to converting them further down the line.
While bottom of the funnel CPCs are becoming increasingly expensive, top of the funnel CPCs remain comparatively low. This allows us to use a mix of organic and paid activity to get in front of customers in a more cost-effective manner.
Using paid search to promote pre-transactional content brings with it an additional benefit – more than just costing less than a bottom of the funnel generic click. Through engaging with users earlier, we can become far more intelligent about how we re-engage with them further down the funnel.
By using re-targeting to engage with lower funnel search terms we remove the need to blanket prospect at this stage – which will help reduce wasted spend on expensive end of journey searches and instead focus on customers we’ve already pre-qualified earlier in their buying cycle.
Coupled with high competition and saturation at the bottom of the funnel, we have the age old issue of cannibalisation.
Creating a marketing mix that allows the channels to compliment each other instead of competing is more important than ever. Two of the biggest culprits for cannibalisation have historically been paid and organic search. Ensuring that these two channels collaborate to maximise visibility while not stepping on each other’s toes is key to driving incremental growth from Search. While finding this blend can be difficult it can be done.
At QueryClick, we use Unified Search, which forms part of our marketing attribution solution Corvidae, to analyse paid and organic data to identify where true incremental opportunity lies within each channel.
Accurately Accounting for Marketing Spend
As mentioned earlier, moving further back up the funnel brings with it its own challenges. The biggest of which is accurate measurement of the impact of investment at this stage of the journey.
The root cause of this challenge comes from the very tools we use to measure performance in the first place. Traditional analytics products have in-built limitations when it comes to assigning the correct value to the channels that drove conversions. This is a result of the attribution model which is applied by default.
Within Google Analytics, Last Click attribution is the default option – this means that all conversion values are assigned to the channel which drove the last interaction before purchase. This model negates any, and all, other channel interactions throughout a customer’s journey and declares the last channel the sole victor.
As any marketer knows – this is not a true reflection of a customer’s journey – so why is it that we accept it when assessing the performance of our marketing campaigns?
With Marketing Managers everywhere needing to drive more customers for less budget, the need to accurately attribute the value of higher funnel activity correctly increases exponentially. Investment in pre-transactional paid search activity is likely to yield poor to negative ROI under current attribution models – however, with a truly holistic attribution model you will be able to see the value added and the revenue ultimately driven as a result.
At QueryClick we have developed Corvidae to solve this very problem. Unlocking the true attribution of your marketing efforts allows you to make intelligent decisions and really focus on driving more customers…. even with that reduced budget.
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