Effective Marketing – What Matters & What Doesn’t

It’s interesting to watch the shift around marketing that is taking place in the modern consulting world.

Donald Miller makes a great point about it in his book, “Marketing Made Simple” (which we highly recommend for entrepreneurs who are trying to grow but don’t really understand how to market themselves).

He says that marketing has traditionally been seen as an art. Creativity and ingenuity were sought after, desirable qualities in a marketer. However, those who are well acquainted with the day-in, day-out world of growing businesses (especially coaching and consulting businesses) know that it is actually not an art at all.

It is a science.

The process of putting offers in front of your audience bears far more resemblance to the “scientific method” than it does to any artistic method known to man.

Think about it… you:

• Form an idea (a hypothesis if you will) about what will motivate your market toward a specific action
• You create and launch a test
• You observe and record the results of that test
• Then you make adjustments and launch again
• In the end, you either prove or disprove your original idea

So, if you’re a marketer (or a business owner who markets themselves), throw on your white lab coat, put on some safety goggles, and grab your beakers – you’re a SCIENTIST.

Maybe that excites you. Maybe it terrifies you.

If you’re part of the latter camp, this article is for you! Let’s dig into how we can avoid overwhelm and “Analysis Paralysis” by knowing how to truly measure the success of your marketing, how to decide what’s important, and how to ignore what’s NOT important.

One thing that seems to pop up over and over again when our clients come to us with marketing issues that they’re trying to solve is a lack of understanding of what actually matters.

When they lack that grasp on the “key things” they tend to elevate the importance of vanity metrics.

Here’s a perfect example from the realm of paid ads (where this kind of thinking will literally ROB you of blind).

We often get asked questions like, “What is a good CPL (cost per lead) for my campaign?”

This is sort of like asking, “What should a human being weigh?”

There is no single, objectively correct answer to that question – because there are too many variables to account for:

• Man or woman?
• How old are they?
• How tall are they?
• Do they exercise?
• What is their percentage of body fat?

And that’s just naming a few!

Beyond that, weight isn’t a good indicator of overall HEALTH anyway. In a lot of ways, weight is a… you guessed it… vanity metric. Does it contribute indirectly to your health? Yes. Can it be a contributing factor to certain health issues? Sure.

But is it the “make or break” metric for determining whether or not you are in good health? Not at all.

Cost per lead is very much the same way. It’s not the best indicator of your overall marketing health. So if you’re using it as a measuring stick, to determine the effectiveness of your marketing strategy, you’re missing the forest for the trees.

How you define SUCCESS matters!

In our experience, one of the best measures of success for your marketing efforts if you’re trying to grow a coaching or consulting business is the Customer Acquisition Cost (CaC). In other industries, this is known as the Cost Per Sale (CPS).

You calculate this number by taking your total marketing spend for a given period of time, and dividing it by the total number of clients brought into your program during that same period of time.

(NOTE: If you sell any kind of front end products as part of your marketing, whether at the top of the funnel or at the middle of the funnel, the revenue from those products should be subtracted from the marketing spend before you divide by the client count – we call this measuring the “Net CaC.” If you only market via a direct offer asset like a VSL, webinar, or call booking funnel, you can just calculate your “Gross CaC” without the front end revenue. If you’re not sure which kinds of offers you’re running, we have an article here where we break down the different types of demonstration assets you can use to market yourself.)

Perhaps you’re already feeling overwhelmed by all this talk about metrics, data, and 3-letter acronyms (and boy, do marketers love their acronyms).

It’s important that we talk about this for a second.

Data is good. You can’t improve what you don’t measure, and you can’t measure what you don’t track.

However, the main problem for most modern entrepreneurs is not a lack of data around performance – it’s TOO MUCH data. The very real concern is that they will drown in all of it, resulting in “Analysis Paralysis.”

Our Client Success Director, Mike Walker, had a great note about this in his Editor’s Letter for the inaugural issue of the Consulting Digest. He titled his letter “Death by Data,” and it was centered around this very idea.

Here’s a great excerpt:

“How does one reap the competitive advantages of data without getting mired in the weeds of minutiae?

When it comes to building a successful business, there is no shortage of metrics and data points to consider. From the macro economics that impact us all within a globally networked financial market – down to the nuanced intricacies of our individual audiences and product niches…

Everything matters, because everything is connected.

At first glance that understandably may be overwhelming to consider – “Mike, how the hell am I going to deal with everything if it all matters?!”

The short answer is – you don’t have to. Just because it matters, doesn’t mean you should try to process and control it all. Just because it all matters – doesnt by default suggest that it’s controllable anyway, you wouldn’t be able to even if you tried. The proverbial “Butterfly Effect’’ is always at play.

The key to surviving information overload as a business owner is to narrow your focus towards the measurable and controllable Key Performance Indicators (KPIs) that you can clearly associate as lead indicators.”

He goes on to define the difference between a “leading indicator” and a “lagging indicator.”

• Leading indicator – a predictive measurement of future outcomes
• Lagging indicator – an output measurement of actual performance

This means that, as long as you have a grasp on which KPIs feed the MAIN outcome you’re measuring for, you can cut out the overemphasis on things that don’t matter, and trust that the lagging indicators will catch up.

Yes, data is good. Yes, data matters.

But, you can’t hope to control all of it. So you must start with the most important things, and work your way outward.

Of course, all of the data in the world can’t compensate for good, old fashioned action.

That’s why it’s not only important to observe and measure, but also to turn those measurements into an action plan.

A few pieces of advice where that is concerned:

• Limit the variables of each new test – Multivariate testing can be beneficial, but is too overwhelming for most entrepreneurs to keep up with. Instead, pick one observable measurement to optimize for, set a target to achieve, and launch.
• Make sure the testing window is long enough to provide meaningful data – This is especially true when talking about paid media, but applies to elements of funnel testing and conversion rate optimization as well. One of the worst things you can do is cut off a test before it has had enough time, spend, or impressions to give you any actionable data. We try to let any new test run for at least 7 days, and, in the case of ads, about 10,000 impressions.
• Have a clear “source of truth” – Before any test kicks off, you should know where to find the data you need, how to look at it and how you want to interpret it. The platform, dashboard, or data sheet that you are referring to in order to determine what’s working and what’s not is what we call your “source of truth.”
• Beware the day-to-day results – look for the TRENDS – This goes hand in hand with ensuring that you’re letting your tests run for long enough. You’re looking for trends, not blips on the radar. If you have a particularly good day with a certain test, don’t let that bias you toward that test. Likewise, if you have a particularly bad day, don’t write the test off as a failure. Look for the positive or negative trends lines between the daily results.
• Have some tripwires in place – Again, this is more geared toward your paid media folks. But in “marketing speak” a tripwire is the point at which you are prepared to shut a test off for underperformance inside of the testing window. If you are spending a decent amount per day on the test, you should have a number in mind at which you will turn a test off if it hasn’t produced a result. We usually set this number at roughly 4-5X the target KPI. So, say you’re targeting a minimum $20 cost per lead (and that is in line with your average on a particular offer), you might say, “If this test campaign reaches $100 in spend without producing a single lead, we cut it off and regroup.”

Don’t be intimidated by data. Instead, treat the data as your ally – telling a story of the effectiveness of the marketing you do, and showing you new things to try, land mines to avoid, mistakes to not repeat, and pockets of efficiency that you can exploit.

You’re a scientist now. Time to let the data take you to the next level!