Table of Contents
- 0.1 What are your goals and how much do you want to spend on them?
- 0.2 Who are you marketing to?
- 0.3 How much are your customers worth to you?
- 1 Do that with all of your buyer personas and you will have a clear picture of:
- 2 How much budget you need to reach your goals?
- 3 From this we can calculate that:
Internet usage, in this past decade, has doubled and this change has drastically affected how people purchase from and interact with businesses. Thus, digital marketing or internet marketing is a big aspect of marketing these days for all businesses. All businesses are diverting their efforts towards digital marketing as almost all of the audience is present online.
So, to most business owners and marketers, the question arises of how to start. We are going to resolve your questions in this article and shed some light on how to start your digital marketing journey.
First of all, you need to know what assets you have and what strategies you can use for your digital marketing. Digital assets are basically everything that you can use for your online presence. Below are a few examples of digital assets:
- Website: your company website
- Images: infographics, product or service pictures, company pictures, etc.
- Video content: product demo, video ads, how-to videos, etc.
- Written content: testimonials, blog posts, newspaper articles, product or service descriptions, etc.
- Reviews: company reviews, product or service review
- Branded assets: logo, icons, acronyms, etc.
- Social media pages
These are just some examples of the digital assets a company can utilize. Marketers always come up with new ways to reach customers.
Digital marketing strategies:
Below are some of the most preferred and effective digital marketing strategies that most businesses are using:
- Search engine optimization
- Pay-Per-Click advertising
- Paid online advertising
- Social media marketing
- Email marketing
- Content marketing
- Affiliate marketing
As you can see in the list above, there are numerous ways to market your business digitally or online, and even more tools to operate and execute that. Managing which could be a hectic task, which is why most of the business choose to hire marketing services from professional companies.
So, how to start your digital marketing journey?
Getting started with digital marketing is quite easy. Most online social media platforms will provide a business page that can give you a fair amount of insights and data to analyze and move forward in your digital efforts. There are numerous free tools that you can use to create, manage and track the progress of your marketing campaigns.
No matter what marketing tool or marketing strategy you choose there are certain things you need to be clear of, certain questions you need to answer before digitally marketing your business. These are:
What are your goals and how much do you want to spend on them?
Digital marketing is an investment and you have to spend money on it. So, before spending money on it you first need to clear out what are your expectations from it or what are your goals. How you approach and utilize digital marketing can vary depending on the goal you have, for example, driving traffic to the leads, leads or conversions, revenue generation, or a certain return on investment (ROI).
Boiling down to the basics if your digital marketing efforts are not generating any profitable revenue then what is the point of even marketing online? Therefore, your main aim should be to gain a certain return on investment. Considering how much revenue you want to make, then you need to determine how much you want to spend on digital marketing or your digital marketing budget. Once that is clear you can determine how much of your budget digital ads will be spent on to reach your revenue goals.
Who are you marketing to?
Once you identify and understand your goals and how much you want to make from digital marketing, then you need to identify who you need to market to. This is a crucial step, finding out your ideal or right audience and customer profiles because different buyers require different marketing strategies. And, all these different kinds of profiles build up to be completely different types of buyers. Therefore, understanding your target market is very important to create an effective digital marketing strategy.
The best way to know about your customers and prospects is to know from your sales team and customer service team. They are the ones who have been handling your customers one on one and probably understand them better. Other than that you still need to research about them through social networking (more if you do not have a sales and customer support team).
While sales and customer service teams are a great source of knowing your audience, they still are passive sources. The best source still, will always be by directly interacting with your customers. Getting the information you need directly from them, for example, conversating with your customers for reviews and feedbacks, asking them how they found you, what convinced them with your product or service or made them buy it, how you can improve your product and services, etc.
How much are your customers worth to you?
With the buyer personas you have created you can find out the return on investment with respect to how much you spend to acquire a particular type of buyer. For example, if you have 3 variants of a product let’s say for a mobile phone which is differentiated based on performance, camera quality, and general usage. Now when people who you have differentiated into different buyer personas, will buy from you then it will help you get an idea of buyer preferences across all your buyer personas.
With this information, you can determine how much you spend on acquiring a particular buyer which is called acquisition cost. We derive it by dividing all the costs spent on acquiring additional customers by the number of customers acquired in the time period the money was spent. For example, if a company spent $100 on marketing in a year and acquired 100 customers in the same year, their Customer acquisition cost (CAC) is $1.00.
Do that with all of your buyer personas and you will have a clear picture of:
- What kind of buyer is most likely to buy from you and their preferences.
- how much do you spend per person on average to acquire those buyers or how much is your CAC.
- how much net profit is being derived from a buyer in accordance with the average marketing efforts spent on that person? and,
- how should you formulate effective marketing strategies.
- All of your foundation is now ready with this information for formulating an effective marketing strategy and to calculate the marketing budget.
How much budget you need to reach your goals?
It is pretty simple from now. All you need is your CAC, average number of purchases and average purchase order value and average new customers per month. From these you can calculate how much budget you are going to need.
For example, let’s say,
your CAC = $400,
average Order Value = $100,
average number of purchases =20 and,
average new number of customers/month = 10
From this we can calculate that:
- Your first-time purchase revenue is $1000( Avg new customers x Avg order value)
- Your estimated long term revenue generated each month would be $20,000(monthly first time purchase revenue x avg no. of customers/month)
- Your average ad budget per month should be atleast $4000 (CAC x avg no. of new customers)
- Your ROI will be 500% ($20,000 return on $4,000 spend)
As you can see, by deriving these values you can make a fair estimate of your marketing budget and its ROI, and can formulate your marketing plan and allocation of efforts accordingly. Digital marketing is the marketing of the future the faster you adopt to it, the better. You may find find it difficult to manage in the start that is why it is always advised to employ professionals to start your digital marketing journey.