How to up your digital marketing game

October 22, 2019 By    

Long-time football coach George Allen said, “If you want to catch more fish, use more hooks.”

Marketers call that “effective frequency,” which is the number of times a consumer must be exposed to an advertising message before responding to it. Psychologists, perhaps in an effort to avoid being associated with marketers and fishermen, call it the “mere exposure effect” and believe that consumers need to see a message 10 to 20 times to have the maximum effect.

Source: Caywood Propane Gas Inc. Click to enlarge

Source: Caywood Propane Gas Inc. Click to enlarge

If all of this is true, how do you catch new customers with a limited marketing budget? Let’s begin with some numbers:

So based on the numbers, you should put 100 percent of your marketing spend into internet display to more efficiently hit the marketer’s magic effective frequency, right? Wrong.

Again, sticking to the numbers, a response is not a sale. If it’s not a sale, it’s not a deposit in your bank account, the most important marketing measure of all. In other words, it’s all about the conversion rate, which is the number of respondents who actually make a purchase once they stop by, call you or land on your webpage.

For the past five years or so, we have used all of the media described here, plus newspapers and community events (e.g., county fairs) to reach our prospective customers. That made it hard to test channel efficiency. We also were spending a lot of money on advertising.

This year, we decided to conduct a test. In 2018, over 56 percent of our marketing spend was on community support, newspapers and direct mail. The remaining 44 percent was a digital spend of some sort (adwords, display, video and streaming TV).

In contrast, so far this year about 85 percent of our marketing spend has been digital and 15 percent has been non-digital. And it’s worth mentioning that we reduced our total spend by about 50 percent.

The net result is that our new customer growth is 10 percent ahead of our new customer growth at the same time last year. That’s a 55 percent reduction in the marketing cost per new customer. To say that we are happy with the results would be something of an uncharacteristic understatement for this column.

It also occurred to us that we might be reaping what we sow with our marketing dollars. Our theory is that we might get more digital customers with digital marketing channels than we will with traditional marketing channels. This is similar to our theory that we’ll catch more tuna in the ocean than we will in Lake Michigan. And, as previously illustrated in this column, digital customers are more profitable because they cost less to serve.

Finally, and for the avoidance of doubt, we are not giving up on our traditional, old school customers, and we think traditional media still plays an important role in brand building and customer awareness. We love our old school customers, and the evangelical streak in us believes that we can convince most of them to do more digital business with us.

After all, as Henry Ford famously said, “If I asked people what they wanted, they would have said faster horses.” Maybe it’s time for you to up your digital marketing game and convince your existing customers that using digital tools is a bit like shifting from a fast horse to a Model T.

Christopher Caywood is a co-owner of Caywood Propane Gas Inc. in Hudson, Michigan.

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