Why did you start your business? I’ll bet the farm that “because I wanted to be a marketer” wasn’t your answer. However, if you’re like the hundreds of small business owners I’ve worked with you probably realized about 30 seconds after you opened your doors that if you didn’t become a marketer, you weren’t going to be a small business owner for very long. And, truth be told, that frustrates you because you don’t enjoy marketing and it distracts you from other areas of your business.
Well, I have some good news. While there’s no way to eliminate the need for you to market your business, you can eliminate a lot of your frustration by addressing the top three marketing mistakes I see businesses make.
Mistake #1: Focus on the Wrong Metrics
The sheer volume of data available to analyze marketing today is mindboggling. Google Analytics, by itself, provides so much data that you can eat up an entire weekend analyzing it – only to discover it ultimately leads to contradictory conclusions depending on what data you prioritize. And that’s just the data for your website! Reporting for digital advertising, social media and other areas of marketing are just as overwhelming and contradictory.
Having access to all that data is a good thing, but it can serve to distract small business owners from the data that really matters. That’s why it’s critical to narrow your focus down to the only two metrics that ultimately matter when it comes to marketing: Cost to Acquire a Customer and Lifetime Value of a Customer. If cash flow is an issue you will want to focus on Monthly or Annual Customer Value instead of Lifetime Value, but the fundamental principle is the same. If the value (i.e. revenue) of a customer is greater than the cost to acquire a customer, you’re in good shape. Profitable businesses aren’t built on vanity metrics like clicks, impressions and likes. Profitable businesses are built through metrics that can actually be deposited at the bank, so focus your attention on those.
Mistake #2: Focus on the Wrong Tactics
There’s certainly no shortage of tactics and tools on which small businesses can spend their marketing dollars today. Unfortunately, too many small businesses gravitate only toward the trendy tactics and ignore the essential marketing tactics. They focus all their time and money on tactics that generate likes, followers, and opens while ignoring essential tactics lead conversion, customer retention, and online reputation that generate dollars. The result is a marketing plan that keeps them busy and feeling good but an income statement that makes them sick to their stomach.
Instead of chasing all the hottest marketing trends, small business owners should focus first on maximizing the revenue from your existing customers, increasing the percentage of leads that become customers, and delivering a customer experience that creates raving fans. Those essentials are the foundation for a profitable, stress-free business. They certainly won’t make your business as cool as jumping on the hottest new social media bandwagon, but they will make you money – and isn’t that the reason you started your business in first place?
Mistake #3: Focus on the Wrong Brand
Over the last ten years, the power to define a business’ brand has transitioned from the business to consumers. Ten years ago businesses went through agonizing exercises to define their brand and then leveraged marketing to tell consumers what they thought their brand was. That’s all changed. In today’s world, consumers define a business’ brand and leverage technology and social media to tell the business — as well as hundreds, if not thousands, of other consumers — what their brand really is. And they do it 24/7/365.
Unfortunately, most business (both large and small) have failed to adapt their marketing to reflect this transformation. They continue to focus marketing on telling and selling. They send bulk emails, template postcards, and rely on discounts to retain their customers. Consumer-defined brands, on the other hand, focus their marketing on customer experience and relationship. They send thank you notes, satisfaction emails and deliver a consistent, world-class experience to retain their customers.
The tactics are the same, but the focus is different. Start by defining the experience you want to deliver to your customers and then build your marketing around promoting that experience and your operations around delivering on it. There’s absolutely nothing wrong with deciding what you want your brand to be, but at the end of the day it’s consumers who are going to decide if that’s what it really is.