Here is a question which doesn’t unfortunately have a simple answer.
When should you spend more on your architectural, engineering and construction marketing?
What if your search investment could be managed as a profit center? A growing cadre of performance marketers are rethinking digital advertising basics like KPIs, budgets and customer journeys?all while driving maximum business value. We?re referring to this trend as “profit-driven marketing,? and we?ve been watching from the front row as they develop paid search strategies that ignore traditional efficiency metrics and chase the dollars to win more customers.
One of the central premises is the idea that sometimes marketers need to bid higher and spend more to make more. If the goal is to maximize profits, then an effective bidding strategy shouldn’t be tied to a budget or cost per acquisition (CPA). For example, would you prefer an $80 CPA or a $90 CPA? The answer should be ?it depends.? Perhaps the higher priced ad appears at the top of a search results page, bringing in more sales volume than the less expensive CPA unit. This would be a case where spending more means making more. The point is to stay completely focused on profit, and follow the consumers? lead. They?ll show you what to bid for and when.
Of course, if you look at that chart closely, you can also see you can easily overspend, badly, and of course you need lots of data to determine the correct price point for your AdWords purchase; including real conversion-rate information. (And we need to consider the “moving target” problem; especially in online marketing — what works today may not work well in three months or in some cases three days.)
Worse, these strategies may make sense for high volume consumer products with short sales cycles but could be deadly in the AEC sector. Going beyond the specifics of online advertising, how can you even begin to determine whether a larger up-front marketing investment will truly yield profitable results when you may need to give the process six months to two years for a single order and that order (say a $3 million school construction contract) will skewer your results wildly either as highly profitable or a dead loss one way or another?
Yuk.?At first glance, it seems?risky and dangerous indeed to throw increasing?marketing budgets?into the pot, especially considering this industry’s cyclical character, the long sales cycle, and the challenge in gathering enough statistically relevant data to make informed future profit-driven advance marketing investments.
However, I think there are still rational ways you can invest in marketing (and elect to increase your investments), following these stages:
Start with consultation, information gathering, and KPI benchmarking.
I can see good reason to pay for consulting services with someone with a proven track record (check references!) to help you frame your strategy and develop some Key Performance Indicators (KPIs) you can build into your metrics/management systems. You may have a specific objective in mind or simply want to look at the big picture. At least, study the resources from the Society for Marketing Professional Services (SMPS) in determining some benchmarks.
Set out your rules and systems including Go/No Go, lead tracking and follow-through, social media and existing client retention?processes.
The idea here is to have a clear set of policies based on industry best practices. The consultant(s) may help you with these systems. A challenge, of course, will be if the rule makes sense to your organization because you won’t have enough internal statistical data to validate the worthiness of the change. However,?if you don’t have rules, you won’t have a proper tracking system to determine if money you spend on future marketing really is helping you achieve the results you wish.
Review existing marketing spending and assess its association (or lack of association) with your systems and benchmarking rules.
This will be easy to do if you don’t currently spend any money on marketing (though you should consider staff time and costs in RFP responses, especially if you didn’t have a good Go/No Go system. It will be more challenging if you have an existing budget for trade shows, conferences, online media, and the like. One approach is not to rush any changes for the first year — and then look at the comparisons and associations with your existing strategies with results. Of course, you’ll be tempted to move much more quickly if you are burning up cash and in financial distress. Alas, many AEC marketing decisions are made for knee-jerk or desperation reasons.
Finally, test and try out new initiatives in an analytical way, allowing a 10 to 20 per cent experimentation budget for new and off-the-wall ideas.
Now you have some science behind your marketing, and you can begin to see if the results are worth the effort. And you can build a repertoire of tools and experiences to guide you in your future endeavours.
Of course this seemingly simple strategy is anything but easy to implement, but I’ll throw a strategy out that may seem daring and risky but may save you a pile of money.
First, after you determine your Go/No Go rules and other essential policies, ditch any marketing activity where you do not have evidence of results and value. Be brutal here. It doesn’t matter if you’ve done it before, or not. If you have been attending an industry trade show and paying for an expensive booth for years, but cannot really see direct business resulting from it, cancel your participation (or just send one person to visit and walk the show floor). If you have been cranking out ineffective proposals, can most of the proposals and perhaps elect to spend a bit more on the ones that work.
Then add up all the savings, and watch what happens with the marketing that remains, maybe spending some of the cash on consultants for the areas where you know you are week or could see some improvement.
Revisit in a year, and then start the process afresh, with the new insights and a readiness to invest strategically.
If you would like me to provide a quick marketing review, and help you deliver an effectiveness/building strategy, you can reach me at email@example.com or set up a conversation through the contact function on this blog.