When it's worth thinking short term
If you're a small business owner or you’re someone in a larger business wearing many hats, you don't have time to get into the detail of everything.
We’ve already looked at why it’s important to keep things simple. So today we’re looking at the simplest strategy you can deploy: only acquisition.
We’ll look at:
Why doing it this way works.
A few of the drawbacks of doing it this way and how you account for them.
Who is best off doing it.
The tactics you can use to roll out.
Why
Vs other approaches
A lot of small business only focus their marketing efforts in the acquisition or purchase stage of the funnel (aka sales activation). It’s because you can see quantifiable results far quicker and easier than activity higher up in the funnel. This is mainly because you don’t need flashy or long term tracking aside from your sales figures and, ideally, some channel reporting to tie spend to your conversions and ROI.
The trade-off with this approach is awareness, consideration and preference phase work go right out the window and potentially post-purchase/repurchase with them.
Let me be clear - this isn’t the optimum or ideal way to do marketing. But I’m pragmatic and so are you; so here’s how it could work.
The good
How it can work for you
Focusing solely on sales acquisition can be a great idea, because if you do it:
You'll be able to measure return on investment on nearly every penny you invest.
You'll see returns on the effort you put in relatively quickly because the work you’re doing is so close to your conversion point (a sale) so you won’t need to wait for customers to convert later on. Being this close to the conversion point also means you can optimise far easier.
You’re capitalising on existing buyer intent rather than trying to generate it yourself which is much easier.
Having the ability to convert prospects or leads when they come to you is super important as a baseline for any additional work further up the funnel - otherwise, you're just wasting effort.
The bad
and what you can do about it.
Depending on how large and what industry your business is in means these few downsides may still be ok and a worthwhile trade-off.
Here’s what you should be wary of and ways to counter the challenges:
Problem: Commoditisation
If you're in a competitive market, it's harder to differentiate from your competitors. You differentiate yourself by making customers aware of you and understanding what you do.
If your customers don’t see you or your product as differentiated (even if it/you are) they see you as a commodity. What do commodities have left to compete on? Price. Not a great place to be.
Commoditisation is a result of low brand equity which means more price-sensitive customers. More price-sensitive customers mean it’s harder to raise your prices without losing them.
It’s not impossible, but it’s incredibly difficult to generate brand equity as a commodity. But realistically this comes from things like awareness, consideration and preference stage activity pre-purchase. And if we’re focusing on sales activation this is obviously off the table.
As well as delivering a great service or product once you’ve found the customer, you can try and build brand equity in the repurchase stage. But you’re starting in 5th gear because you’ve got the customer in using the price lever. This makes them undervalue your normal price - they’ll just wait ‘til you drop your price again before they purchase or look elsewhere for someone comparable and cheaper.
Fix: Loss leaders
The way you can try and get around this is by focusing your sales activation work even tighter and trying to acquire the customer through an initial lower value conversion, potentially even at a loss, and then up-selling once they know who you are.
A classic example of this you’re probably aware of is milk in supermarkets. Milk is what’s known as ‘loss leader'. That means most supermarkets will sell it below cost to get you in the door because they know you’ll also pick up a handful of other items which they’ll make the money back on.
Problem: It’s hard to come from behind
If you’re not the primary brand or company in the category, you might struggle to get any customer. When your competitors have their shit together and are awesome at their sales activation work, you’re in even more trouble. The nail in the coffin for this approach is when your competitors are killing their sales activation work and building their brand higher up in the funnel.
Fix: Capitalise on the intent your competitors generate
You might be able to get around this by taking advantage of the intent your competitors build and out-bidding them on their SEM (Search Engine Marketing) keywords when their customers start looking for them online. Obviously, if you’re not online this won’t work. The real-life version of this is the sandwich board waving person advertising your business outside or on the way to a competitors shop.
You’re trying to take your competitor’s dregs, rather than creating your company’s own prospects. Also, there are ethical questions you might want to ask yourself about what you’re doing. The biggest downside is the cost can often outweigh the benefits of taking the sales activation only approach.
Who is this approach best for?
Small organisations with a limited budget - just getting this right will be more valuable than any other activity higher in your funnel. Plus you’ll have relative control over your cost per acquisition… because all of your marketing budget is for acquisition. Get this right, then try and build your funnel longer.
Categories where problem recognition is high - customers know about what you do and are already looking for it. All you need to do is be there when they do.
Categories with low competition/high barriers to entry for competitors- If your product or company is one of few players in the category you and your competitors are shooting fish in a barrel. But if you’re in a space with few competitors you might find your positioning actually becomes more important to differentiate you from your competitors. Positioning is a little fluffy for most people though, so maybe focus on nailing your acquisition work first.
When your competitors suck at marketing - Obviously. If they’re not there and you are, who’s going to win that one?
Highly rational purchases - While our friends Field and Binet wouldn’t be supportive of just doing sales activation without an associated brand layer - their research does say where customers are making rational purchases (vs emotional ones), sales activation is easier. They do conclude though that in these instances you should be spending more of your budget on the harder task - i.e. emotional driven brand building.
Industries or categories where switch rates are high - if you have highly disloyal customers because it’s easy to switch between suppliers or options, most of your spend should be on sales activation (even if you do a brand layer). This is another Field and Binet special.
One place you shouldn’t use it is if you’re a new product or new category you have no buyer intent to capitalise on. You’ll struggle to find people to buy. So while it makes sense to consider a sales activation, anything multiplied by zero is still zero.
How do you do it?
Ok - you’re sold on why you should do it, what to be wary of and you’re keen to start. This is actually the easy part because it’s hugely tactical.
Channels in order of priority to get right
Your conversion point. This could be your product page, landing pages, lead generators and any offline alternatives (including things that point to physical stores). There’s no point spending any money pointing people to convert if they can’t do it easily. Once you have the traffic coming in (digital or foot) optimise using your data where possible. This is often known as conversion rate optimisation (CRO) and can get very scientific by using controlled A/B tests.
SEO (search engine optimisation) - it’s free, except for the time and effort you put in. Getting technical SEO right strengthens the performance your digital conversion points (as they’ll rank higher). Strategic SEO is targeting specific keywords or phrases with content often higher in the funnel, but still more valuable than a bullet point can make it sound! I’ll do another article on SEO shortly.
SEM (search engine marketing) - targeting keywords with paid advertising using Google AdWords and maybe Bing. But probably just Google. Everyone is searching, you should be there when they are to capitalise on that intent.
Social advertising - Facebook and myriad other platforms have stacks of self-service tools available that make running acquisition campaigns very easy. Their targeting is borderline creepy, but it works and you can let their algorithm work its magic and optimise spend and targeting
Retargeting - this one I’ve included because it’s good practice, but it depends on your budget and targeting… as well as what Google and Apple decide to do with their privacy rules. If you’re unsure of what this is, think about the advertising that follows you around the web once you’ve browsed a product on a website. You use programmatic bidding to target customers who’ve shown intent and visited your page with display advertising… to bring them back to your page and convert.
Pro-tips: Lead magnets and email marketing.
This is kind of straying into the research phase, but we’ll include it. If your customer visits your page, looks interested but doesn’t convert, give them an opportunity to ‘micro-convert’ and get their email so you can follow up.
Email is my favourite channel as a marketer. The ROI is off the chain because it’s cheap and works. But you can’t send emails without someone to send them to. So use a piece of content or a deal to create a value exchange so the customer doesn’t mind giving you their details.
Summary
Having a rock-solid sales activation strategy is fundamental to your business’ success. Is doing it without investing higher up in the funnel a good idea? Based on the performance of most marketing strategies, no. But that doesn’t mean you can’t, and won’t have a red hot crack at getting it right for all the benefits I outlined above.
Think of it this way. If you look at a purchase only approach you're basically waiting for the customer to walk into your store, pick up the product they think they want, and then bring it to the cash register to buy. You're not doing anything to get them in the store in the first place. You're not helping them with their purchase or steering them towards bigger, better or more suitable products for them. You're not making a loyal customer you've built a relationship with. You're making a transactional customer who will skip out on you for a cheaper price if they can find one elsewhere.
If you’ve had a play with SEO, SEM, Social advertising and a website and it’s already too much… Sing out and we’ll take your six.