Which web marketing activity maximises customer lifetime value: Google Adwords or blogs or social marketing or email marketing?
In over 20 years of marketing I have used all forms of advertising, direct marketing, point of sale marketing, PR etc. My key learning is that there isn’t one answer that works for everyone
Which marketing activities should I focus on?
It depends on a range of criteria including your target audience, your product or service, your brand, your level of brand awareness, your competition, the economy and your value offer.
However, there are some important principles and a process which provides a high chance of success. In this article, I am assuming that you have done the basics and have developed a compelling brand thought that differentiates you from your competitors and is attractive to your target audience.
In this example. let’s imagine you have a budget of £2,000 and a gross margin of £100 per product sale but the principle holds whether you have a budget of £2,000 or £20 million.
‘Single hit marketing activities’
‘Single hit’ marketing activitities include traditional advertising such as press, TV and radio as well as Pay Per Click. You pay for the activity and it either works or it doesn’t. Within a relatively short time of the end of the activity there will be no further leads or sales.
You could pay £2,000 to go in a trade magazine to be ‘seen’ (or not as the case may be) by x,000 people. Ignoring any brand effects, the worst case is that the ad fails to generate a single lead. The ad would need to deliver 20 sales @ £100 margin to cover the £2,000 cost. Of course, the ad may be amazing and deliver 100 sales or more.
Since Google launched AdWords, my preference is to use Pay Per Click (PPC) advertising rather than traditional advertising. PPC is a great way to attract web leads. You only pay if someone clicks your ad. Your ads could be seen 100,000 times and clicked 2,000 times which would give a 2% click through rate. If the average cost was £1 per click (it could be higher or lower), the 2,000 clicks would cost £2,000.
In this example, the PPC campaign would bring 2,000 prospects to your website. You would need just 1% of these visitors to make a single sale to cover the cost of the PPC campaign. Within a very short time, you can work out what the maximum amount you can afford to pay for a click in order to deliver a profitable customer on the first sale based on your conversion rates and sales value.
However, as a single hit activity, once you stop the PPC campaign, the leads stop. The activity may well still be extremely valuable if the PPC sourced customers make repeat purchases over time. PPC can also provide valuable learning on which keywords / ad content & landing pages deliver the best results.
Building marketing assets
An alternative approach is to build marketing assets that deliver value over a longer period of time.
You could invest £2,000 in SEO activities which might include building a series of pages that rank well for specific keywords that convert to sales.
An SEO approach takes much longer to take effect than a PPC campaign but can deliver results over a longer time frame. The benefits might be seen for months or years but this will depend on competitor activity.
Although, SEO can provide longer term benefits than PPC on a £ for £ comparison, it should not be seen as just a one-off activity. Over time, content will need to be refreshed, more quality inbound links added to ensure the page continues to rank well given an ever increasing number of competitiive pages.
Similarly, investing time and / or money in writing quality blogs also offers long term value. In addition to contributing towards SEO performance, blogs can build up regular readers and encourage people to visit the website again and again.
Building an opt-in list for emails or newsletters is a great way to build and maintain a dialogue with customers and prtospects and can re-use existing blog and social media content
Social media like Facebook & Twitter can also build regular readership, brand affinity and encourage repeat visits.
Activities like Blogs and Facebook are not free: the cost can be the time to set up, write and publish content and analyse results.
So should I do ‘single hit’ marketing activities or build web marketing assets?
Once again, there is no one answer but consider the following?
- what budget do you have available to attract customers?
- how much are you prepared to pay for a new customer?
- have you considered the full customer lifetime value?
- how much time do you have for these activities?
- could you develop great content that people would want to see?
- what expertise do you have to successfully implement these activities?
- how will you measure what’s working and what isn’t?
- do you need immediate results? – n.b. PPC can be rapidly switched on (or off) whilst SEO has a longer set up time