{"id":9841,"date":"2019-05-09T16:56:42","date_gmt":"2019-05-09T21:56:42","guid":{"rendered":"https:\/\/www.retailsystem.com\/cz\/?p=9841"},"modified":"2019-07-09T06:36:28","modified_gmt":"2019-07-09T12:36:28","slug":"retail-marketing-part-science-part-art-part-gut-and-150-tenacity","status":"publish","type":"post","link":"https:\/\/www.retailsystem.com\/cz\/blog\/retail-marketing-part-science-part-art-part-gut-and-150-tenacity\/","title":{"rendered":"Retail Marketing – Part science, part art, part gut and 150% tenacity"},"content":{"rendered":"

So, we are often asked; \u201cJesse, what are dealers doing online?\u201d. Not are they doing eCommerce (well maybe that too) \u2013 but more along the lines of Digital Marketing. You know \u2013 that scary unknown that to most is voodoo snake oil. Let\u2019s pause a moment and look back in time.<\/p>\n

Years ago, I vividly remember a healthy sized dealer telling me in precise detail how predictable the flow of business was because of what is now considered traditional marketing efforts; primarily the newspaper. Those \u00bd or full page (or more) ads promoting the \u201cBig Event\u201d. Each week\/month seemed to have the endless array of \u201cBig Events\u201d. Today \u2013 dealers are looking for that \u201cdigital equal\u201d to \u201cbring them in\u201d with the same result. Let me tell you – it can absolutely be accomplished, but it is a completely different landscape!<\/p>\n

\"\"Time to put on the consumer hat. Let\u2019s take a journey together. Now for each of us the journey can and will be different. I\u2019ll do it one way, you another. Others \u2013 yet a different way. Welcome to the\u201cdigitally empowered consumer\u201d. (Remember \u2013 your consumer hat is on. You are one of them – what device are you on now…)! Think about making a major purchase. Let\u2019s pick something fun. How about a new sofa! (I\u2019d say boat \u2013 but let\u2019s stick to a relevant good).<\/p>\n

How many people impulsively \u201cbuy\u201d a sofa. I would say none. There is obviously a \u201cneed\u201d for that sofa \u2013 thus the purchase. Yes, you may feel a bit of impulsiveness when you get to the actual transaction of the sofa \u2013 but you probably didn\u2019t just buy a sofa for buying a sofas sake. Maybe even a bit of buyer’s remorse. Stop and think about your entire journey to that moment. Compare it to if you have a cut; you buy a band-aid. That \u201csofa\u201d journey was a long process that started when you repainted a room that you spent months on prior to painting just contemplating the color; let\u2019s not talk about the endless visits to the social channels comparing flooring choices and feedback from others and then to Lowes or Home Depot to look at swatches\u2026.. finally, months later that perceived need for that sofa! Business hat on \u2013 the traditional marketing efforts we leveraged (the newspaper) looked to toss that wide net and bring in consumers at the \u201ccredit card out\u201d stage. Ready to purchase now. \u201cSale Sale Sale\u201d \u2013 come to our store. Traditional success was then measured in the purchase happening. Find as many consumers as possible, convert some of them into customers. A very defined (and logical?) path. But consumerism today \u2013 that journey you just reflected on above \u2013 as a business you hope to be part of the conversation that may or may not become that eventual purchase; online or in-store. Never forgetting the digitally empowered consumer journey is not linear! So how would you ever put a marketing strategy around that?!?!?! How? You do things different!<\/em><\/p>\n

Here are a few pointers.<\/p>\n

The web is a numbers game \u2013 however don\u2019t blindly spin the wheel!<\/strong> Too many business owners throw good money after bad with the hopes that whatever it is just \u201cgoes away\u201d \u2013 or in the case of Digital Marketing; just produces those magical results. Stop. Time to know a couple things and work some math so you have a foundation for numbers-based decisions! For example; Customer Acquisition Cost (CAC). Do you know what this is for your business? Good for you if you said yes. I’ll gamble and say most have not. Grab last year\u2019s financials and fill in this example with your numbers. \u201cOK, last year I did $4M in sales. That was from 8100 sales invoices (individual sales for clarity). However, a bit more digging – 20% were from repeat customers. My total marketing costs for the year were $120,000 all in (meaning EVERYTHING I associate with getting the businesses from a marketing perspective. That is signage, advertising, popcorn and pizza for the big sale, the dunk tank for the grand reopening, yes – everything). Now a few assumptions about what made repeat customers \u2013 customers again, you „deduct“ that the actual 8100 orders for the year and you get about 6400 new customers. OK, not that I needed all that for my CAC (Customer Acquisition Cost) \u2013 but it will be nice to have in a bit \ud83d\ude0a. You spent $120K last year \u2013 again all in for Marketing. You had 6400 unique customers. It cost you $18.75 per customer ($120,000\/6400). Cool. Ever looked at that for your business? Now let\u2019s have a bit more fun. Remember those revenue numbers. $4M divided by 8100 or an average ticket of about $494. Run the math for the previous year. Same exercise.<\/p>\n

You expect to grow \u2013 but keep budgets the same. FAIL!<\/strong> Or worse, do more with less. I am a huge advocate for making the most of every dollar \u2013 but using actual data to drive decisions. However, marketing (engagement) is always a leading activity \u2013 no matter how safe the decision \u2013 marketing is still a risk. Build it and they will come?! Spend it and they may or may not. I have seen to many times where a business owner wants more revenue and wants it at a lower cost. Absolutely. Strive for operational efficiencies. Maximize staffing. Fully burden assets. But marketing drives business. Especially online! Now that we (you) calculated your CAC above. Wouldn\u2019t it make sense to work the numbers backwards to see what that equates to for a marketing increase for your \u201cgrowth expectations\u201d. What does it mean if you want a 10% increase in business \u2013 lets break it down using my example: ($4M X 10% = $400,000 in increased sales; then divided by the $494 avg order = 810 Sales Invoices; then times the repeat customer factor of 80% (reduction for that repeat customers trended average #) = 648 unique new customers; then times the $18.75 CAC = $12,150 in increased Marketing Budget. So the total marketing budget for the „growth“ year ahead is $132,150! Numbers driven decisions. Very rough example – but you gotta love it!<\/p>\n

Know your industry. Know your products. Know your customer!<\/strong> What is the average consumer buying cycle for a durable good like a sofa? Again, thinking today\u2019s consumer. I bet it is 6-months (or more) before there is a chance of you selling a sofa to that prospect. Again, the room gets painted. The house sold and then a new one purchased. The move is done. Taxes are in. Kids off to college. You get it. No impulse here. Yet leaders view marketing as a sprint. What happens if you advertise this month and then stop next month because you didn\u2019t see immediate results? Wouldn\u2019t it make sense to stay the course for at least the average buying cycle \u2013 so the 6-months? Again, number driven decision. Using my example – the „smartly executed“ marketing-spend of the „growth revised“ engagement budget of $11,012 a month ($120K + $12,150 = $132,150\/12 or $11,012 a month) will put you on a smart trajectory. If you know the average is 6-months for the happy couple to buy that sofa, knowing based on real fact that they will indeed research and burn the internet up until that point \u2013 you hopefully get my point<\/em>. Today\u2019s marketing activity is not a fire and forget. It is not an explosive sprint – not a one and done. The „engagement“ flywheel must spin consistently \u2013 always applying constant pressure. Man, feels like Jim Collins. \u201cBreakthrough\u201d! Stay the course. Measure and adjust. The tools are there (a topic for another day).<\/p>\n

So, recap.<\/p>\n