With the New Year about to arrive in less than seven weeks, many small business owners are currently reevaluating their past year sales and marketing activities.
While looking at your business goals for 2020, the question comes about which marketing medium to use. It is a valid question, but it can be best answered by looking at the business plan, the desired revenue goal and other metrics.
What Mediums Are We Looking At?
Traditional marketing mediums include print, radio, television, print advertisements and direct mail while online mediums include website, email, social media, pay per click and search engine marketing.
So, how do you as a small business owner choose which to use?
Let’s begin with your budget. Do you have one? In your business plan, as part of your marketing plan, you should have a marketing budget. The budget will play a role in determining which marketing medium to use and establishing metrics.
What is your marketing budget?
What should your marketing budget be? The typical standard answer will be 5-10% of your gross revenue if you are an established business. If you are a start up or a 2-year-old company, your marketing budget needs to be higher in order to be able to build and increase brand presence in the marketplace. Young companies are usually advised to spend anywhere from 12 to 20% of their gross revenue for their marketing budget.
Your accountant, CFO or COO of your business should be able to work with you on calculating your marketing budget based on estimated gross revenue for next year.
Write your Marketing Budget here:
What are Your Marketing Goals?
Once you have established your budget, the next step is to look at your marketing goals. What are your marketing goals? These goals are in your marketing plan. Your marketing goals should be aligned with your business goals.
For example – as a small business owner, you should have an idea of what revenue goal you wan to reach for next year. Remember – make sure it is a realistic and attainable goal.
You don’t pull a number out of a hat like a magician. You should be looking at least the past two years. Your accountant, CFO or COO can work with you on this as well. It is ok to be conservative in establishing your revenue goal. For example, lets say it looks like you grew your business each year 25%. Then that is the percentage you can stick with to pick your revenue goal for the New Year. This is your business. Don’t try to be anything that you are not. If you feel you should be growing at least 35% instead of 25%- that is another part of your business goal. Remember, we’re working to put down SMART goals here.
What is your Revenue Goal:
How Many Buyers You Need
Next is to figure out how many specific purchases you need to reach that revenue goal. The way to look at it is the average sale of your customer. If your average sale of your customer is $500 and your revenue goal is $100,000, then you need approximately 200 buyers to purchase your products.
How’s your closing rate? Is your closing rate more than 50% or less than 50%? Remember we said that we estimated that you needed 200 buyers to purchase your products in order to meet your revenue goals. If your closing rate is 50% and half don’t purchase your products – then you need actually 800 buyers in order to meet your revenue goals.
What is the number of buyers you need:
Next is Leads. We have sales leads and marketing leads. For those in lead generating business, we refer them as SQL and MQL. SQL stands for sales qualified leads and MQL is marketing qualified leads.
SQL means that the lead is a prospective customer who is already been researched and vetted. We have identified that we need 800 buyers to meet our revenue goals. For sales, we should be generating 1600 opportunities. Therefore the percentage of SQL is 50%.
Put your SQL here:
A marketing qualified lead is a ‘visitor’ who is likely to be a potential customer. A MQL is recognized as when he/she has shown interest to the website content, or product or has engagement with a company’s website for certain amount of time or completed landing page form. To identify the number of MQL to become SQL is challenging for all businesses. Thus 50% is a safe percentage to stick with. So if we’re sticking with 50% and we’re providing 1600 SQL to the sales team or to the business, then you are expected to obtain 3200 MQL.
Put your MQL here:
Have You Been Tracking Your Marketing Mediums?
Now it is time to look at your mediums. You should have historical data from each of your mediums you implemented last year. You should have the number of how many phone calls or visitors to the website each medium you used generated.
Where are those data usually obtained?
Reporting is provided mostly by Google Analytics, Google Adword reports, Facebook Ad Manager, Your Social Media Scheduling Tool, Your CRM, – whatever medium you used – you should be tracking each month and each quarter on your MQL, SQL and revenue goals.
Your website is your sales and marketing tool and plays a vital role in determining what mediums to use. In order to attract more people to visit your website, make sure that the content in the landing page is good enough. The more qualified content the website has, the more visitors will spend time on your website. Based on statistics of number of people who visit your website and the number of people who became customers, you should be able to figure out a suitable conversion rate. For now, we’re looking at that we need to generate 3200 MQL (marketing qualified leads), therefore the website needs to attract 160,000 visitors.
With that number, you can now take a look at your mediums, past historical data and your budget to determine which ones are going to help you achieve your goals.
Your historical data should show you which medium or mediums is generating the most and best results in terms of providing the best-qualified leads. Those are the ones you want to allocate your marketing budget.