How to Counter the Drastic Increases in Digital Marketing Costs
The major digital media players are charging more for ads, which even AdAge said in an April 2021 article. Plus your organization’s ads now appear in a more cluttered environment. The creative and messaging must be more powerful and targeted in order to get the same results as in the past. This article provides strategies to help you counter the price increases and keep your customer acquisition and retention programs performing.
The key steps in the strategy:
- Compare performance in customer acquisition channels and “rebalance”
- Improve customer retention channels and cross-sell with new approaches
- Evaluate your creative and segment more
These steps may seem daunting, but there are some quick insights and wins. Let’s break it down and share those steps.
Customer Acquisition Performance
Most organizations spend the majority of the marketing budget to gain new customers. The channels used to acquire new customers vary depending on your target audience, product, or service. Customer acquisition channels include social media, paid media, influencer marketing, search engine optimization, and more. The big difference in channels is that some are explicitly paid for, such as pay-per-click or paid social. Other channels require investment in content, such as organic social, or time spent improving search engine optimization. It’s time to carefully consider the resources committed to each type of customer acquisition and most likely rebalance.
- CUT – Carefully analyze the CPA (cost per acquisition) from paid media and paid social channels. Cut programs that are not performing.
- INVEST – Spend more time and funds on organic, including SEO and organic social. Search engine optimization can drive more customers to your site, and keep doing so for months after you’ve made the investment.
Improve Customer Retention
Once you’ve gotten the first purchase, the next step is keeping customers, also known as Customer Retention. One statistic on retention says it costs 10 times as much to acquire a customer vs retaining one. (can you find a link?) In addition, it’s important to not only get repeat purchases in the same category but to cross-sell and introduce customers to new products and services.
The most common customer retention channels include email, social and now SMS (text). If you aren’t using SMS by inviting customers to sign up when they visit your site for both SMS and email, you may be missing one of the biggest trends in marketing right now. Also, take a look at your email. Are you segmenting? Providing relevant offers to individuals, or just discounting? You may need to change to a different email system that supports more segmentation. Costs are dropping for email platforms and capabilities are increasing. Struggling with content for your email? Consider a newsletter or an industry news summary if you don’t have enough content of your own.
To help you analyze your retention marketing performance, create a content calendar and note the metrics such as opens (emails), clickthroughs, and other forms of engagement. Examine what content worked best. The simple process of creating and maintaining the calendar will uncover where improvements can be made.
Evaluate the Creative and Segments
Once you have the metrics from your acquisition and retention campaigns, it’s time to really examine the creative from both. Is your creative unique and “on brand” for your product or service? Or is your creative too similar to competitors? Is it using the same stock photography again and again? Are you showing images to the right segments? Are you showing cat owners pictures of dogs?
One way to improve creative is to do A/B testing. This is the process of splitting the list or audience to compare the performance of existing creative (A – control) to new creative (B – test). The tests can be created for acquisition and retention marketing programs.
Ready to Redesign Your Programs to Counter Rising Costs?
With 30+ years of experience, James Ross has helped many clients adapt to the changing world of digital marketing. We help clients in all industries leverage digital to acquire and retain clients cost-effectively. Read our latest blog here, and contact us to get started on delivering strong ROI in a challenging environment!