Marketing has become an exciting business.
On one hand, there are more options and social marketing channels than ever before. On the other hand, it’s dramatically more competitive than it used to be and it gets harder and harder to generate a reasonable ROI.
And ROI is the holy grail of every marketer out there. To get those desired results marketers need to be creative, plan carefully and innovate at the same time.
That’s not an easy task carry out, especially on a day-to-day basis. However, once you get there, you’re in a spot that’s hard to beat.
In this article, we’ll show you how can you best optimize your marketing campaigns, pick the right channels and use that channel mix to hit your ROI goals.
Why should you optimize your channel mix?
To create a profitable marketing business, it’s a struggle to find the right ratio between Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV).
The better the ratio, the more scalability can be gained from social marketing campaigns.
Digital products like Instagram and Snapchat expanded so quickly because they managed to nail these metrics by simply having their CAC equal zero.
However, for most businesses, it’s merely a dream to acquire customers for free and grow their customer base virally. And that is where your marketing skills come in.
If you can determine the ideal marketing channel mix, while simultaneously acquiring the right customers in the right way, you will maximize growth and revenues.
It’s simple, the more efficient your channels, the better the returns. From there, you can invest more in the highest-performing channels.
Here’s how to get started.
Start with the right questions
The first step to building a highly scalable marketing strategy is to know what you’re doing. To get that understanding start with the following questions.
1. Where are your ideal customers?
As a marketer, you know who your ideal customer personas are. The big questions are, where do they learn about new products and what affects their purchasing decisions?
The best way to find out is to reach out to them and ask them. While it sounds simple, it’s astonishing how few marketers actually reach out and get some face-time with their ideal buyers or even gather that information in a reliable way.
Asking a question, ‘how did you learn about our service’ after checkout isn’t enough. Reach out to them, meet them or run a survey and provide some desirable incentive to gather those answers.
2. Where is your competition?
There are many services that allow you to identify your competitors best-performing marketing and social media campaigns, content and keywords. This can be a powerful way to beat them.
However, sometimes the best way to win is to escape competition completely. To achieve that, you first need to know where your competitors are and aren’t.
This is where social listening is a mandatory step. It should now be routine for brands to have ongoing listening projects.
These should monitor the social and online chatter around topics and hashtags relevant to your space, as well your brand name and that of competitors’.
3. Is there an untapped opportunity?
Ultimately, that’s what you want to find out. Often, those untapped channels can hide that golden nugget of information that leads to a dramatic boost in marketing performance.
And while it’s not guaranteed you will find one, these channels need to be carefully examined. There is no hard or fast rule for how to do this. Just keep up with technology and trends – again social listening is invaluable here – and never be afraid to test, test and test again.
If there is one opportunity you can definitely not afford to miss, it is the explosive growth of video.
4. What’s your 80/20 rule?
80/20 rule also known as Pareto Rule states that 80% of your results come from 20% of your actions. This can be widely applied to business as well.
For example, Microsoft once found out that fixing about 20% of bugs eliminates 80% of crashes. Or that 90-80% of complaints come from 10-20% of customers.
While the ratio may not be exactly 80/20 you do want to find out what current social marketing channels deliver the most results and double down on them.
Offline vs. online, paid vs. earned channels
Understanding different kinds of channels and how they complement each other is the next step to building an optimal marketing channel mix. These are the five core types of marketing channels:
Paid media: Includes all kinds of advertising, from direct mail and offline ads to search ads or Facebook ads.
Owned media: These include media that you have full control over, from creation to distribution. These include all of your hosted content, press releases, in-store ads and branding, and so on.
Granted media: Whenever you distribute your content via open platform owned by multiple parties, such as email, SMS marketing or SEO your marketing falls into this category.
Leased media: Unlike granted media, we’re talking about closed platforms owned by a single party such as Facebook, Instagram and so on. All social media marketing that’s not paid falls here.
Earned media: That’s content created and distributed by anyone on any platform. It includes comments, ratings, reviews, referrals, and so on.
When evaluating these channels you want to look at what performance you get from each. Some channels deliver a lot of low-quality traffic others the other way around.
For some audiences, the lead lifecycle lasts longer, while others convert instantly. Some channels may be a great way to distribute your content while others deliver an immediate ROI.
You want to study each channel and see what the benefits are. What you want to do is to take a portion of your budget, break it down into smaller chunks and test each channel.
Then take the results and see how it performs for your particular product or service.
How to determine your ROI
While it appears simple, determining your ROI can be a real science. What metrics you track and how you track them will determine the quality of data you’ll get.
There are different kinds of metrics that each provide a different value. Before you get into tracking data it’s important to distinguish between:
Quantitative and qualitative metrics: Quantitative metrics are numbers. They tell you what’s going on. Qualitative data answers the question “Why?” You need both. For example, some channels will give you a low conversion rate but you may get a higher CLV leads making more money in the long term.
Vanity and actionable metrics: Vanity metrics do little more than boost your ego. For example, website traffic isn’t necessarily indicative of brand interest. Alternately, actionable metrics change how you act and help you pick the right direction. An example would be a conversion rate.
Leading and lagging metrics: Leading metrics help you predict the future. For example, a number of leads in your funnel gives you a good picture of what you can expect in terms of conversions. Lagging metrics look into the past and uncover problems. Churn rate is a great example.
So, how do you pick the right metric? It depends on where you currently are and what are your goals. When you measure an ROI you may want to look at multiple things at the same time.
Get the numbers but follow up with surveys to understand the ‘why?’ Likewise, look back into the past and see how leads from each channel behave and what long term revenues do they generate.
However, whatever metrics you go with, a good metric is by definition one that’s understandable, comparative, and changes your behavior (making it actionable).
The ratio by design is comparative. If you have nothing to benchmark you metric against, it’s useless. Likewise, it must be actionable otherwise it’s just a data for entertainment.
How can you optimize your channel mix?
Now that you know how to get the right data, you want to use it to your advantage. Here are some tips on what to do with it.
Double down on top performers: Once you identify top performing channels, you want to double down on them. That means not only investment-wise but also keep improving and optimizing.
Ditch the low performing channels: Following the 80/20 rule, once you find out which channels deliver poor results and fall into the 80% category, the best thing to do is to get rid of them or lower your investment and monitor it for a while if you feel there may be some valuable findings to gain.
Continuously monitor successful channels: As explained earlier, it’s often the lagging metrics that show you the real long-term value of each channel. By monitoring the performance you build a ground for continuous improvement and even higher ROI in the future.
Use multi-channel attribution data: This basically means you want to connect your marketing efforts to each stage of your funnel, to get the complete picture and an understanding of how each of your channels impacts the bottom line.
Follow your own data, not industry benchmarks: As a marketer, you’re basically innovating. Your journey is unique and that’s where your biggest competitive advantage lies. That means you should test each channel yourself and get your own data instead of being a follower of somebody else’s work.
Optimizing your ROI isn’t a one-off event. It’s a process that never ends. Every time you make an experiment, you gain new data and insights that impact your next experiment.
That’s the loop you want to be running. Even if you have found your winning social marketing channels, you should be able to optimize them separately for better and better performance.