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Trends, Tips, Oddities

Show Me the Money [with More Channels]

by MaryEllen Tribby

maryellen-tribbyRadio, TV, banner ads, pay-per-click (PPC), magazine ads, billboards… There are dozens if not hundreds of marketing channels you can use to get your sales message across. [Many marketers forget this]. We don’t expect you to use all of them all of the time – but you should know what your options are. Test different channels and different channel combinations, and roll out with what is most effective for you and your organization.

Do not, however, make the mistake of thinking that if a specific channel does not meet the return on investment (ROI) goal for your overall multi-channel marketing campaign it should be disregarded.

Take a look at the chart below:

Channel Cost Revenue # of Orders ROI
Endorsed e-mail $10,000 $30,000 300 300 percent
Banner ads $10,000 $16,000 160 160 percent
PPC $10,000 $15,700 157 157 percent
Teleconference $5,000 $4,500 45 90 percent
Direct mail $50,000 40,000 400 80 percent
Total $85,000 $106,200 1,062 124.9 percent

In this example, you are selling your product for $100. You had $85,000 to spend and your goal was to make $1.25 for every dollar you spent, or a return on investment of 125 percent.

You had tremendous success with your online efforts (endorsed e-mails, banner ads, and PPC campaigns). On your teleconference, your marketing efforts yielded a 90 percent ROI and lost $500. And on your direct-mail campaign, you produced only an 80 percent ROI, losing a whopping $10,000.

It has been our experience that customers who come in as a result of direct-mail efforts have a higher lifetime value.

Since two of your five channels lost a total of $10,500, are you going to cut them from your multi-channel campaign? Of course not. Those two channels brought in nearly 42 percent of your new customers. Customers you now have the opportunity to bond with and sell more products to. It has been our experience that customers who come in as a result of direct-mail efforts have a higher lifetime value. This means that the 400 new customers from your direct-mail campaign will most likely become your best customers. On top of all this, you’ve met your goal of 125 percent ROI on your overall campaign.

The idea is to subsidize some channels with the channels that have greater ROIs to produce incremental orders that can bring in additional revenues.


changingEd: This article appears courtesy of Early To Rise, a free newsletter dedicated to making money, improving health, secrets to success. For a complimentary subscription, visit http://www.earlytorise.com.

P.S.  For those wanting to learn more about cross-channel marketing, MaryEllen has an amazing book on the topic entitled Changing the Channel. I read this over the Christmas break and it has to be one of the best, most objective and down-to-earth books on marketing I’ve found. Based on 20 years of real-world experience, not just theory. It’s a virtual case study on how a company achieved massive growth using direct response marketing, across multiple channels – Openly discussing what worked and what didn’t…

Every marketing student, entrepreneur and business owner should read this book

It covers must-know tricks on direct mail, email, search engines, telemarketing, social media, events, PR, print advertising, radio, TV and more. An easy-to-read book that puts it all into perspective – Something few marketing books or ‘experts’ do today, who all seem to have their own agendas and media biases.

This is the essential marketing handbook for any NZ business.

It can be purchased online from www.fishpond.co.nz

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