Marketing

Picture the scene. You work for a corporate marketing department with, of course, a limited budget. You’re launching a new product and considering how to market it.

Traditionally, you’d buy print advertising space in newspapers and magazines. To run a small colour ad in the Guardian costs around £4,000 per day for a circulation of around 250,000. If 5% read your body copy that’s 12,500 reads at a cost of 32p per read.

Alternatively, you could spend your £4,000 on creating a Facebook game. A good game will get at least 100,000 plays at a cost of 4p each. Not only is the cost a fraction of a single day’s print advertising in a single newspaper but the quality of the interaction is massively higher. A user might spend, say, 10 minutes playing a game related to your product. Imagine that, 10 minutes fully engaged with your product for 4p – including a direct link for ordering that product.

As far as I am concerned, this is a complete no-brainer. And if you’re wondering where I got my Facebook figures from, they’re actual figures from a real game.

So why don’t corporate marketing departments commission more of these games? Two reasons. Firstly, ignorance of online media. This is, of course, unforgivable in so-called “professionals”. The second is even more unforgivable and can be summed up in the sentence “no-one ever got sacked for running a print advert”. In other words, keep doing what you’ve always done and no-one can criticise you. And that, my friends, is why working in a corporate department is a mug’s game. I know, I’ve been there.

Use Facebook to Comment on this Post

{ 0 comments }

Any marketer worth their salt will tell you that “the money’s in the list”. What they mean is that, over a period, you can convert many more visitors to buyers by having a mailing list. Sometimes this means broadcasting to all subscribers when you have news or information to relate but usually these lists also use an autoresponder that sends out emails in a set sequence.

I recently set up a membership site which offers free membership with paid upgrades. At the end of the process, the member was automatically added to my Mailchimp mailing list – they would then, of course, have to confirm that they wanted to be on the list because “double opt-in” is a requirement of all respectable lists. The problem is that even with a freebie thrown in as an incentive to complete the process, only 1 in 4 of the people who became free members signed up to the list.

Now, you might ask why I did it this way around and the truth is that it was simply because this was the way Wishlist Member (the WordPress membership plugin I use) did it.

Why was it important to get people on the list? Because I know that I will get a much higher conversion rate for the paid memberships if I remind and prompt people to upgrade over the following days. It’s also worth building up a list because a targeted mailing list has a value.

So, on Monday, I reversed the process. I set things up so that when the user visited the site they were invited (using the Popup Domination plugin) to sign up for a free membership via the mailing list. They then get the double optin confirmation at which point they are directed to the page containing the registration box for getting their free membership of the site. This way, I guarantee that they’ve signed up to the list before they get access to the site. Sure, they could easily unsubscribe but then those sorts of people would be unlikely to buy in any case.

The results so far has been impressive. A slight drop in the number of free members but the percentage of daily mailing list signups has quadrupled. Next week, I should see this improvement in mailing list conversion translate into paid upgrades.

Use Facebook to Comment on this Post

{ 0 comments }

One of the challenges of any business is to find ways of increasing the conversion rate whether that’s the percentage of website visitors who go on to buy or the percentage of people who come into a shop who then buy. The problem is that different businesses will find that different approaches work for their customers.

Here are three possibilities for increasing conversion:

Offer A Discount

Sometimes a simple discount is the most effective way of increasing conversion. It’s essential that you know how much your product/service costs you before you can eat into your profit margin with a discount. The obvious question is then “how much discount?”. This depends on the market: some will respond to a 5-10% reduction whereas in other markets nothing less than 50% will provoke a reaction.

Offer Free Delivery

Some markets will respond well to free delivery – particularly if delivery would normally be expensive (eg laptop delivery). However, my experience to date has been that this is the least effective approach.

Offer A Free Extra

In some cases, giving extra above and beyond the standard product is effective. For example, “buy this and get something else in addition” or “buy one get one free”.

There are two key things you must do:

1. Work out how much the cost of the promotion will eat into the profit per unit
2. Test, test, test, test

The only way you can find out which form of promotion works for your customers is to test. As an example, with our web shop MakingYourOwnCandles.co.uk we have tested all three.

We found that Free Delivery was ineffective, even though our product is quite heavy. Offering a percentage reduction is effective (20% in our case) and increased sales, gross and net profit significantly. However, for our customers, giving away something free was the most attractive promotion. In our case, we offered a free Refill kit which effectively doubled the number of candles our customers could make. This increased sales by 35% in a month during which we’d normally expect a decline for seasonal reasons. The conversion rate increased by nearly 50%.

The point is that we only found out by testing. One of the biggest challenges in online business- especially a new business, is in establishing what it is that turns your customers on. Remember that customers buy based on value rather than price: your job is to increase value until it reaches a tipping point that improves your conversion rate whilst retaining a healthy profit margin.

Use Facebook to Comment on this Post

{ 0 comments }

Internet Marketing analysts AdGooroo have released their Search Advertising Report for the first quarter of 2010. Interestingly, it shows that advertising across all three major search engines (Google, Yahoo and Bing) has increased in these three months which is a good indicator that advertisers, at least, are more confident about the future.

It’s an interesting, brief, report and I recommend downloading it.

Use Facebook to Comment on this Post

{ 0 comments }

Toyota has had a rough time of it lately – entirely its own fault. The business world is replete with examples of companies founded on exceptional quality losing sight of this over the years and compromising the quality in the name of cost cutting. Anyone who’s read or listened to Stephen Covey’s “The 7 Habits of Highly Effective People” will be familiar with the “clam chowder” story. Having watched the TV series going behind the scenes at John Lewis, I found myself wondering whether they, too, are running the risk of losing their distinctiveness in the name of cost reduction (eg “just in time” stock management is risky). [click to continue…]

Use Facebook to Comment on this Post

{ 0 comments }