Why you need two kinds of marketing - and how it works
Marketing is one of the most important - and difficult - parts of any business. All sales start with marketing; without the right kind of marketing you won't attract your ideal clients, you won't have leads to nurture and you won't make the sales you need to. Because marketing is as much art as science, there's a lot of confusion around it. For the marketing novice there is an overwhelm of information, promises and hype; making sense of what's worth investing time and money in is difficult at the best of times, and marketing is only one part of a successful business.
The importance of marketing formula
To understand just how important marketing is, a simple formula will help. Here's how it works:
Your total revenue is determined by the number of leads you can generate for your business; your closing rate (the percentage of those clients that eventually buy) and the average revenue per sale. Here's what it looks like:
So, for example, if you generate 1,000 leads and your closing rate is 10% you will have 100 sales. At an average of $100 per sale your total revenue will be $10,000. Here's what this looks like:
So, to make more revenue, there are only three things you can do:
- generate more leads;
- improve your closing rate; or
- increase the average revenue per sale.
Usually, you will try to do all three. But marketing is a numbers game - not everyone is ready to buy when you are ready to sell. So you have to start with generating leads for your business.
And that's where the problems start. If you get low-quality leads (like when you buy a mailing list) your closing rate will be very low. Price your products too low and your total revenue will suffer - but so will your time because delivering lots of low-value products or services is way more work than delivering a few high-value ones.
And when you've captured a lead, the fun is just starting.
The Tornado Method definition of marketing
Marketing and sales experts will tell you there is a big difference between marketing and sales. The two are distinct sets of activities of course, and in large organisations they are served by distinct and separate departments.
But in a small business you don't have the luxury of teams of people to do marketing and sales. You have to do it all yourself, in addition to doing everything else including delivering those products or services. Overwhelm is your constant companion.
In the Tornado Method, one of the ways we deal with overwhelm is to break marketing and sales into three distinct activities:
- lead nurturing; and
By breaking things down into smaller blocks, we make it easier to understand what we're trying to achieve with each activity. In fact, we can measure how effective each activity is with a single question:
In the Tornado Method, the purpose of marketing is defined as follows:
Marketing is all the stuff we do to make potential clients aware of us, that we have something that is of interest to them, and get them to connect with us.
And we can measure the effectiveness of our marketing by asking a single question:
Is my marketing generating enough of the right kinds of leads?
We've already made a distinction between marketing, lead nurturing and sales; to further simplify things, we can break marketing down into two kinds of marketing. They are:
- brand awareness marketing; and
- targeted marketing.
Let's look at each of these in turn.
Brand Awareness Marketing
Brand awareness marketing is a continuous stream of messages to your target market, designed to make them aware you exist, you have something of interest to them and get them to connect to you.
In the "real" world we see brand awareness marketing every day; the McDonalds Golden Arches, company logos and names on buildings, events sponsored by companies who have their name displayed on banners, bags and water bottles.
In the digital world, brand awareness marketing is usually done via social media channels. Facebook, Twitter and LinkedIn are obvious examples; but online versions of trade magazines like Inc, Entrepreneur and the Huffington Post are also useful channels to make people aware you exist.
To make your brand awareness marketing work, you have to show up frequently and consistently. You have to show up frequently to be heard between all the noise; you have to show up consistently to build trust. In my upcoming Tornado Marketing self-study course, I use the analogy of a leaky bucket.
The idea is that brand awareness marketing works when you show up frequently and consistently. This is like keeping a leaky bucket topped up:
- you have to show up frequently (to top up the bucket) otherwise the bucket runs dry and you have to start filling it up from scratch again;
- you have to show up consistently to build trust (keep the bucket topped up); skip a day or a week and you lose the awareness you've built so far.
A portion of brand awareness marketing can be done using a "set it and forget it" strategy. You only have to get your name or logo up on that water tower once; you can queue up a series of messages to go out on social media. But if you are using social media to build brand awareness, you also have to remember to keep the "social" in social media. If you're not being social, your marketing efforts won't be as effective.
The second kind of marketing is targeted marketing. This is marketing for anything that happens on a specific date.
In targeted marketing, you are "targeting" a specific event that takes place on a specific date. The purpose of your marketing is to raise awareness for the event and get as many people engaged as possible.
The event itself can be a live event like a workshop, or the launch of a new product or service, or even just participating in a conference. The key factor is that the event takes place on a specific date; you have to drive as many people as possible to the event or make them aware of it so that you can maximise the impact of the event.
In Tornado Marketing, we use the analogy of a summer rainstorm.
If you've ever experienced a summer rainstorm, you know that it starts with a smell in the air; then a few drops here and there; then more rain until the heavens open up and a deluge of water threatens to wash away everything. Then the rain disappears, the skies clear and the world is clean and fresh.
Targeted marketing follows a similar pattern:
- start with a few low-key mentions of the upcoming event with little detail around it;
- as you get closer to the event, the frequency of your marketing messages increases together with the amount of detail;
- just before and on the event day you raise the buzz and excitement to get as many people as possible to get engaged; and
- after the event you remind people how great it was, perhaps publish some pictures and follow up with the leads or sales you generated.
The biggest mistake that people make in targeted marketing is starting too late. Filling a workshop is not easy, and the more time you're going to ask people to devote to the event the longer before the time you have to start marketing it so they can reserve time in their calendars.
The biggest mistake that people make in targeted marketing is starting too late.
If you're hosting a 2-day workshop you should be thinking of starting your marketing at least 3 months in advance; pros like Tony Robbins regularly market their events at least a year in advance.
In the Tornado Method we make a distinction between marketing, lead nurturing and sales. This distinction breaks the problem into smaller chunks, and smaller things are easier to deal with than big things.
Similarly, we break marketing down into two main types:
- brand awareness marketing is a continuous stream of marketing messages designed to make people aware you exist, that you have something of interest to them, and get them to connect to you; and
- targeted marketing is for anything with a date, designed to maximise the engagement for the event.
For brand awareness marketing, we use the analogy of keeping a leaky bucket filled; you have to show up frequently and consistently for your brand awareness marketing to work. For targeted marketing, we use the analogy of a summer rainstorm; your marketing starts with a few drops here and there, builds up to a crescendo and follows up with a few more drops and perhaps a rainbow.
If you understand these concepts, you're well on your way to breaking your marketing into smaller, more manageable chunks with a clearly defined purpose.
What you can do now
The Tornado Method is a framework for designing, building and growing a business. You can find more information about it on my website.
Tornado Marketing is a self-study course for people who want (or need) to do their own marketing; or just understand enough about marketing so they can effectively outsource it to someone else. You can find more information about Tornado Marketing here.
The leaky bucket and summer rainstorm graphics in this article are by Derek Evernden; if you're interested in more information about these (and how to get your own made) drop me a note and I will put you in contact with Derek.
And of course your comments are always welcome and much appreciated; email works great.