Assumptions in Digital Marketing
- We do not want to be a company that tells about the way our clients operate because we treat it as a trade secret.
- However, we are happy to share our experiences so that it is possible to find an analogy and apply this methodology to other companies.
- In our activities, we adopted an agile, iterative way of acquiring knowledge about profitable methods of acquiring customers. This means we try to be process masters of build, measure, learn.
- We present, here, our case study, which started in January 2020, in order to make our approach to the process as clear as possible. The description of this case study can be a road map for a company that wants to find its new place on the market due to the current economic situation.
Market experiments in the first quarter of 2020
In the first quarter of 2020, we set the goal of acquiring 3 new customers who would not be recommended to us.
We wanted to become independent of this marketing channel. We know that referral is the cheapest and best working way to run a service business, but it is very unpredictable. We were afraid that at some point, a situation could happen that the lifecycle of several clients would end at once, and we would have downtime in orders.
We decided to start new marketing activities.
Action # 1: Publish Articles on LinkedIn
GOAL: Identify messages that resonate with customers.
Because before starting the promotional campaign, we needed to identify what is currently resonating – is being read by customers – as cheaply and quickly as possible.
That’s why we started publishing articles on LinkedIn – it’s the cheapest way for us to experiment in identifying trends.
- What is Content Marketing and how to increase sales with it?
- How to increase the effectiveness of marketing [research results]?
- How can I get more people to read my blog? [SEMrush]
- How to write an article? 10 rules for writing for sale and SEO [SemRush]
- How to make good business decisions? [SEO research, SEMrush]
- What will work in marketing in 2020? [lessons learned from 2019]
- Which software the CEO can use to manage the company more effectively?
- Best practice for cooperation between the Management Board and Marketing for 2020
- What problems do team leaders have and what to do with them?
Quantitative and qualitative conclusions from the campaign content:
|1||128||8||Content marketing is a moderately interesting topic.|
|2||48||3||Marketing efficiency is not an interesting topic.|
|3||61||0||Writing a blog is not an interesting topic.|
|4||96||8||Writing articles is a fairly interesting topic.|
|5||70||2||Decision-making is not an interesting topic.|
|6||209||18||What will work in marketing in 2020 – this is an interesting topic, you need to write articles referring to current events (we got 1 phone call and positioned this article in SEO to our website).|
|7||135||8||CEO software is a moderately interesting topic.|
|8||140||20||Marketing collaboration with management is a fairly interesting topic, but one of the calls was “from this article”.|
|9||115||12||Problems in management are a moderately interesting topic.|
Based on this, we assumed:
- By publishing 9 articles, we are able to make two customers call us. Assuming that one article costs us at least 5 hours of work. Additionally, we estimate an hour of our work at $100. We get that we spent $4,500 together, and we have two customer contacts. The cost “per lead”, that is for contact with the client, is $2,250 for us. Quite a lot.
- During conversations with clients, I had the opportunity to get to know their needs very well. From the beginning, I tried to prepare a “landing product” – that is, a product that would make the customer want to buy something. It would be best if it was something like “Godfather’s Offer” – an offer from the godfather, that is, you can’t refuse. During these interviews, it was possible to identify it, a service called: Audit and marketing plan for 6 months, for $1000 net (10 hours of our work). It is a very fair proposition, we have learned that customers and we feel bad in the role of sellers of services that the customer may not need. Our competitors sell everything that is on the shelf: social media marketing, content marketing, Google Ads, Facebook Ads, etc. We wanted to distinguish ourselves by the fact that together, after signing a confidentiality agreement, we respond to the real needs of customers. We talk honestly because after signing the contract, we try to answer the question: are we able to help them and how?
- Based on conversations with clients, two of them bought from us the service: Audit and marketing plans for six months.
- ROAS = $2,000 / $4,500 = 0.44, this is not a good result. It means that by investing $1, we earn $0.44. Especially since, as it turned out in practice, 10 hours are not enough to really get involved in the client’s affairs. On average, we worked 14-17 on each audit.
- What makes it possible for us to evaluate this campaign negatively, if not for the fact that one of the clients ordered comprehensive marketing services from us for half a year in a subscription of 20 hours a month.
- Writing articles showed us which content is the most interesting. However, the number of views was too small to be taken seriously on this customer acquisition channel by itself.
- The main conclusion: the message should refer to current events.
Action # 2: Messaging on LinkedIn
GOAL: ROAS = ?
We receive a lot of messages from foreign companies (East and India), where after accepting the invitation to LinkedIn, a sales offer with a list of products is displayed: we make websites, we also know Python, We do SEO, we also know Big Data, but basically if you’d like it, we also know Java because, in fact, we also know e-commerce and 30 other things. Just in case one catches your eye.
We don’t like the way customers are treated this way.
Therefore, we adopted the assumption:
- If we diligently approach each person and approach each person individually, the ROAS will be greater than 1.
We invested 16 hours in:
- LinkedIn searching, analyzing profiles of people from the segment (CEO of companies IT & Tech, small and medium), and creating dedicated messages for them.
- Sample message structure:
I think I could help you attract customers for your business. I was on your website – congratulations on the business model (by the way – you have the date in the footer of your website – 2019, it would be worth updating).
For 14+ years we have been helping IT companies in marketing (70+ companies, 500+ million revenues, one of them won the Forbes Diamond award).
Could we call you 15-30 minutes, would I tell you more about what, I think, could work?
If you agree, before the meeting, I will analyze your activities on the Internet in more detail, and I will also check what your direct competitors are doing. After the interview, I will email this report as a summary.
During the conversation, I hope to be able to suggest some improvements.
tel. +48 660 000 464
- Each message began with dedicated information confirming our individual approach and truthfulness (in the case of the above message, it was finding a small error on the page). We really were on the site, and we really invested 30 minutes in analyzing what and how we can help. In case someone responds – so that we know what we can do.
- Results: 70 messages were sent, 10 people wanted to talk to us (which made us invest more than 10 more hours), no one bought.
- Conclusions: ROAS = 0, $1,600 was lost.
- It is not profitable to send dedicated messages. The temperature of purchases – understood as the intention to conclude a transaction, is too low.
- There was a trend in 2016 by marketing gurus to get in touch with customers before they even think about buying. Because there is no competition there. For example, by sending them a message as we have prepared – “we are here in case you need it.” However, you should also add hours of talks to convince you that it is worth investing in marketing in case the company does not do it. Or she wasn’t working with an agency anymore. My result: 26+ hours of work, no results.
Then we decided to prepare a marketing budget – in the amount of $5,000. We felt confident in terms of product definition and business talks. We knew what to tell customers, what our landing product was.
Only then, we designed paid activities and launched in parallel: # 3 Lead Generation on LinkedIn, # 4 Facebook Ads and # 5 Google Ads.
Action # 3: Lead Generation on LinkedIn
GOAL: ROAS = ?
Sending messages on LinkedIn makes sense – entrepreneurs wanted to talk to us. It is unprofitable to send 70 messages for 16 hours. And the message should be structured differently. It should be longer, more detailed, and should filter out people – who want to socialize.
We came across a brilliant company that helped us to automate the sending of profiled messages (service: Lead Generation). Everything in accordance with the regulations of LinkedIn. We are very pleased with the results – previously we tried to collaborate on Lead Generation with other companies but were dissatisfied.
- We adopted the assumption of 2,000 messages sent to people from the segment (CEO, IT & Tech, small and medium-sized companies from Poland), should give us (according to the experience of the creators) 20 contacts, during which we counted on at least 3 sales of our landing product. Plus, of course, the profit from the sale of subscriptions.
- It seemed fair to us if during 20 business talks we were unable to sell to at least three companies – it means that we have to change the company’s business model (or someone else should talk to customers).
- After sending 1000 messages, we received approval from clients for 20 interviews (we called them “discovery talks”: check if we can help you and how much), 7 CEOs of companies expressed their willingness to cooperate.
- Which, as it turned out later in March, mostly did not happen, because the COVID-19 pandemic broke out, which severely affected businesses potentially interested. In any case, the contracts are waiting to be signed until today and I hope they will start after this whole situation.
- At the same time, we signed contracts with clients from activities # 4 and # 5. Then we made the decision to stop the campaign, halfway, after 1,000 messages had been sent. Mainly because we have run out of production capacity. Our company was unable to sell any more services.
- We recommended the method we discovered to gain new contacts to our subscribers – the results are great. On average, out of 20 interviews, good traders generate $10,000 in profit. ROAS = 5.
- Conclusions: Lead Generation on LinkedIn is a brilliant way to attract new customers through B2B relationships.
Action # 4 Facebook Ads
To make the Facebook Ads campaign more attractive, we prepared videos and a quiz.
- Videos, cost more or less for involvement in the area: 0.10 – 0.15 PLN.
- And a quiz where you could check if your company is “good at digital marketing”.
- For $500, 78 people started completing the quiz, one person finished it, no one contacted me.
- ROAS = 0, investment in advertising and preparation of the quiz did not pay off.
- We have learned that the most profitable segment of the market for us are:
- Men, interested in “business”, in the position of “Founder”, from 35 to 50 years.
Action 5 # Google Ads
GOAL: ROAS = ?
- Customers from Google Ads will have a “high shopping temperature”, in the Google search engine, they most often search for keywords because they want to buy something. And we were not wrong.
- Additionally, we wanted to test which element from our offer would sell best. That is why, apart from the main page, we have created two additional landing pages.
After spending a fortune on the most advanced Google Ads courses, we only need one piece of advice: the customer’s entire shopping path must communicate in the 1 to 1 model (the remaining “techniques” are profitable above the budget of $100,000 per month for advertising).
- So, for example, a customer enters the keyword, “content marketing”,
- Reads an ad, is: a marketing agency that will help you with “content marketing”.
- Then: he enters the site and reads that this is exactly the site for people looking for “content marketing“.
- He contacts the company because he believes that they are great at “content marketing”.
- We spent $3,330. For this amount, 2 060 people came to our website. On average, we paid 1.62 for entering the site and we got 89 conversions from it. So out of these 2,000 people, 89 wrote to us on the form.
- Most of these inputs were, unfortunately, either job inquiries or spam.
- However, from our investment in advertising, we managed to sell 3 audits, of which we obtained subscriptions for 2 of them for $2,000 per month and one for $4,000 per month for a period of six months.
- Best converted, our campaign was to the keyword “marketing agency”, so we stopped displaying the ad for the words “content marketing” or “marketing audit”.
- Throughout the campaign, we optimized the website. We watched recordings of customer behavior (HotJar), where they click, what they watch – where they get lost and when they contact us. We managed to achieve the result: PLN 148 for arranging an interview with the client.
- We were afraid that most likely every company that searched for a marketing agency in Google would probably send the same RFP to several of them. But we also started to deal with it very well. Regardless of the inquiry, we proposed an interview and applied the interpretation: we received your inquiry for Facebook, but if it would not be more sensible – invest 1 hour in a conversation with us, during it we will try to answer the question whether you really need these services, Are they sure they will be profitable for you? It was a bull’s eye, the other companies competed in offering the lowest price for running social media. We thought that companies do not want FanPage or website – they wanna earn. And we are the best in it, in taking responsibility for the result.
It is worth noting that:
When we work with clients, it is very important to us whether they use the Google Ads campaign model based on CPA optimization.
- Optimization of CPC (cost per click) – i.e. optimization of the cost per click – of page entry.
- CPA (cost per acquisition) optimization – optimization of the customer acquisition cost.
In the overwhelming majority of companies we target (I’m shooting: 85%), all campaigns optimized areat the cost-per-click level. So the agencies that support them boast about the result that thanks to them more people enter the site. But it doesn’t make sense.
|Articles||+ Lead Gen.||Facebook Ads +quiz||Google Ads|
|Investment||45 hours||16 hours||$2,000||$500 + work||$3,300 + work|
|Lead||1,000 messages (we interrupted in the middle)||78||89|
|Sale of audits||2 × $1000||0||? – customers wanted to buy but did not sign the paper – the pandemic broke out.
Nevertheless, we evaluate the campaigns positively.
|0||4 × $1000|
|Subscription sale||1 × $2000 – 6 months||0||?||0||2 × $2,000 – 6 months
1 x $4,000 – 6 months
|TOTAL INCOME IN THE LIFE CYCLE||$14,000||0||?||0||$51,000|
- Investing in finding an offer tailored to the market is work based on iterations. In our case, it cost us nearly $10,000 and, as in everything that is done in business, you have to be very patient.
- Thanks to this investment, we learned about the best for us: the
- way of talking to clients, we
- defined an offer – best suited to the needs of our clients –
- for the most effective channel for us – Google Ads.
- And what is most important to us after many optimizations website, conversations with clients and experiments on Google Ads.
We have created a magic box, where after inserting a $1, $5.1 of profit pops up.
This was the ROAS = 5.1 (on the Google Ads channel) from the last weeks of the campaign at the end of February. This is a very good result for us because, as always, we work on a minimum margin – we are developing, we want to occupy the largest market possible. It is a pity that we did not have this knowledge from the beginning, but as a standard, it is reached slowly, in small steps.
What it gave us then:
- Profits – we “clogged” our production capacity, we could not serve more customers. There just weren’t enough of us. Of course, we were still contacted by clients from recommendations and we worked for our regular clients. The best marketing is the one on recommendation, I am the first person to say that “well done” is the best advertisement.
- Security – we knew that if the market conditions did not change, then by restarting Google Ads we would pay $148 for “talking to a potentially interested customer”, of which we have a good chance of selling the service with our product and method of communication: Audit and marketing plan. Of which there is a good chance (with a 2/3 probability) that after conducting a marketing audit, if we do it right, we will sell a subscription to the entire marketing service for 12 or 24 thousand.
- ROAS – the discovery of ROAS > 1 is the dream of every entrepreneur. We achieved a very good result, 5.1. This means in theory that if we
- throw $1,000 into an advertisement, we earn $5,100,
- if we throw the money back into the Google advertisement, we earn $26,010 purely, if we throw it into an advertisement, we will earn:
- $132,651 -> $676,520 -> $3,450,252… then we will become millionaires, on one communication channel, with one offer. 🙂
This was the ROAS = 5.1 (on the Google Ads channel) from the last weeks of the campaign at the end of February. This is a very good result for us, because, as always, we work on a minimum margin – we are developing, we want to occupy the largest market possible. It is a pity that we did not have this knowledge from the beginning, but as a standard, it is reached slowly, in small steps.
Unfortunately, in practice, it doesn’t work that way.
- You can’t scale your services that easily – growing a service company doesn’t work like shifting money from one place to another. You need to take care of the quality of services, hire and train employees.
- Customer acquisition channels resemble an upside down “U”, if you invest $1,000,000 in advertising within a month, it will not make you acquire customers for $5,000,000. The market simply does not have that capacity.
- Economic and social conditions are changing. Some of the clients, for objective reasons, needed to close their businesses due to the pandemic. Of course, we supported them in this decision and offered to terminate all “signed” or “to be signed” contracts and tried to help them in these very turbulent times.