Why you should never spend more than £10,000 per annum on marketing if you want your business to gro
I’m working on a new project that has emerged (as these things normally do) out of conversations with clients and observation.
What would it be like if your marketing budget was NEVER more than £10,000 in a year – and yet your business grew in sales and profits by a steady 20% every year?
I recently met with a new client whose marketing (actually, advertising) budget is in excess of £100,000 per annum (representing around 5% of sales).
We sat down and analysed the ROI from every aspect of what they were doing.
It will come as no surprise that the most difficult area in which to calculate ROI was digital advertising – the considerable spend on Google and Facebook advertising was money disappearing into a black hole and an agency who were constantly asking for “more time”.
When I asked the client why they were tolerating this, their response was around FOMO (fear of missing out) more than it was about focused activity.
As usual, I asked for marks out of 10 on the following:
quality of patient communication at recall – 4/10;
regular and responsible use of social media channels with patient-related content – 2/10;
interesting web site with a low bounce rate – 5/10;
practice blog – 0/10;
monthly email patient newsletter – 2/10;
morning huddles to identify end of treatment reviews – 0/10;
end of treatment reviews (EOTR) – 0/10;
networking in the local community – 0/10;
public speaking at local B2B meetings 0/10;
publishing patient story articles in local free press – 0/10.
Just pause for a moment and reflect on what I have just said.
Over £100,000 a year on advertising.
A 13% effectiveness on internal human interest marketing.
My coaching (yet again) – wean yourself off the drug of advertising and let me teach your team internal marketing and monitor their progress.
I fleshed out a £10,000 per annum marketing spend on web site updates, some select print media advertising and general updates on literature – and asked them to consider cancelling the rest.
I also suggested either an internal promotion or external hire of a marketing champion who could act as “editor” for internally generated patient stories, run social media, create the blog and newsletter(s) and keep the team focused on huddles and EOTRs.
The client is naturally scared to death that cutting the advertising spend will destroy the business, even though they admit that what they are doing currently isn’t working.
High volumes of visits to your web site and/or Facebook Page by price-sensitive strangers isn’t doing you or your business any good at all. It’s just unqualified drive-by traffic and, unless your goal is to be the cheapest dental practice in town, largely ineffective.
Qualified internal recommendation by happy patients – that should be your primary focus on marketing – with a secondary energy to GDP referrals if that’s part of your mission.
So – to end where I started – if you only ever had £10,000 per annum to invest in marketing, where would you put your money?
Not on digital mud against the wall – that’s for sure.