The Key Drivers of the Marketing Spend and Performance Gap
As digital marketing becomes more ubiquitous and sophisticated, the performance gap between businesses that are investing in it and those that are not is widening. There are a number of factors driving this gap:
The ever-changing landscape of digital marketing
New platforms and technologies are constantly emerging, making it difficult for businesses to keep up. Those who are investing in keeping up with the latest trends and technologies are seeing better results than those who are not.
The increasing sophistication of consumers
Consumers are becoming more savvy and discerning about the brands they engage with online. They expect personalised, relevant content and experiences, and they are quick to move on if they don’t get what they want. Businesses that understand this and provide relevant, targeted content and experiences are seeing better results than those who don’t.
The rising cost of customer acquisition
As competition increases, so does the cost of acquiring new customers. Businesses that have efficient digital marketing strategies in place to reach their target audiences at a lower cost are seeing better results than those who don’t.
Digital marketing is no longer a nice-to-have
It’s a necessity for businesses that want to stay competitive in today’s landscape. Those who invest in it now will be well-positioned to reap the benefits in the form of improved performance across all measures.
How to Close the Marketing Spend and Performance GapAs marketers continue to face pressure to do more with less, it’s becoming increasingly difficult to close the gap between spending and performance.
Rethink your Marketing BudgetThe marketing budget is one of the first places companies look to cut costs when belts need tightening. But is this the best strategy? Marketing expert John Quelch says no. “In a downturn, the challenge for marketers is to do more with less,” he writes in Harvard Business Review. “That means using budgets as efficiently as possible and finding creative ways to reach customers and prospects.”
Here are a few things to keep in mind:
- The customer journey is constantly evolving. Think about how your customers interact with your brand today and how that might change in the future. As new technology emerges and consumer behaviour shifts, your marketing strategy should evolve as well. This means being open to trying new channels and tactics and investing in test-and-learn programs.
- The role of marketing is changing. Traditionally, marketing has been focused on raising awareness and generating leads. But with the rise of data and analytics, marketing’s role has shifted towards creating more personalised experiences and driving conversions throughout the buyer journey. Make sure your budget reflects this change by investing in tools and resources that will help you harness customer data and insights.
- You need to invest in both short-term and long-term initiatives. While it’s important to drive immediate results, don’t forget about long-term ROI either. Investing in brand building activities like content marketing can pay off big time down the road by keeping your pipeline full of high-quality leads.
Experiment StrategicallyStrategic experimentation is a key part of closing the marketing spending and performance gap. By experimenting with different marketing strategies, you can identify which ones are most effective for your business. This can help you to allocate your marketing budget more effectively and improve your overall marketing performance.
- Define your goals. What do you want to achieve with your experiment? This will help you to design an experiment that is well suited to your needs.
- Keep it simple. Don’t try to test too many things at once. This will make it difficult to interpret your results.
- Be patient. It may take some time to see results from your experiment. Give it a fair chance before making any decisions about its effectiveness.
- Be flexible. Be prepared to change course if your experiment isn’t yielding the desired results.
Encourage an Innovative Organisational Culture
Innovation has been a key driver of economic growth and prosperity throughout history. Today, it is more important than ever for businesses to foster a culture of innovation in order to stay competitive. There are a number of ways to foster a culture of innovation within a business. One way is to encourage employees to come up with new ideas and solutions to problems. This can be done through formal mechanisms such as employee suggestion programs or informal methods such as encouraging free-flowing brainstorming sessions.
Measuring Marketing Success – The Right WayThe current system for measuring marketing success is deeply flawed. Marketing spend is often measured by return on investment (ROI), but this metric doesn’t take into account the many factors that can influence ROI. This results in a disconnect between what marketers are actually doing and what their bosses think they should be doing. It’s time to close the gap between marketing spending and performance by changing the way we measure success. The new metric should focus on customer lifetime value (CLV). CLV takes into account the entire customer journey, not just isolated incidents like a purchase or a click. It’s a more holistic way to measure success, and it will give you a better understanding of how your marketing efforts are affecting your bottom line.
In order to calculate CLV, you need to track three things: acquisition costs, retention rates, and average revenue per customer. Acquisition costs include everything from advertising to salaries, while retention rates measure how long customers stay with your brand. Average revenue per customer is self-explanatory. Once you have these numbers, you can start to see where your marketing dollars are going and how they’re impacting your business.Change the way you measure success, and you’ll be able to make better decisions about where to allocate your resources. CLV is the key to understanding your customers and driving growth for your business.
Consensus and Collaboration
There is often a disconnect between marketing departments and the agencies they work with. Marketing departments are focused on driving revenue, while agencies are more concerned with brand growth and meeting deliverables. This can lead to tension and a lack of alignment between the two groups. On the other hand, when marketing departments and agencies can work together effectively, it will lead to better results for all parties involved.
The following tips can help to facilitate this collaboration:
1. Define the objectives and KPIs for the project upfront. This will help to ensure that everyone is working towards the same goal and that progress can be measured objectively.
2. Hold regular meetings between all relevant parties to discuss progress, next steps, and any issues that have arisen. This will help keep everyone on the same page and prevent any misunderstandings.
3. Encourage open communication between team members and across departments. This will allow for more creative ideas to flow and for potential problems to be flagged early on.
4. Make use of technology tools that facilitate collaboration, such as online project management platforms or video conferencing software. This will make it easier for team members to work together remotely if necessary.
The Results of Closing The Marketing Spending and Performance GapThe results of closing the marketing spending and performance gap are many and varied, but all point to one conclusion: businesses that close the gap between their marketing spend and performance see significantly improved results. Some of the most common benefits include: 1. Increased Revenue: When businesses close the gap between marketing spend and performance, they see a direct increase in revenue. This is because they are able to more effectively target their marketing efforts, resulting in increased sales and leads. 2. Improved ROI: Another common result of closing the marketing spending and performance gap is improved ROI. This is because businesses are able to better measure the results of their marketing efforts, allowing them to allocate their resources more effectively. 3. Greater Efficiency: Finally, businesses that close the gap between marketing spend and performance tend to be more efficient overall. This is because they are no longer wasting money on ineffective marketing tactics, instead using their resources to create campaigns that produce real results.
With the ever-changing landscape of digital marketing, it can be difficult to keep up with the latest trends and best practices. As a result, many businesses find themselves with a disconnect between their marketing spending and performance. This article has provided some tips on how to close that gap and get the most out of your marketing budget. By being more strategic about where you allocate your resources and using data to inform your decisions, you can make sure that every Dollar, Euro or Rand you spend on marketing contributes to your bottom line. Implement these tips and see how they can help you close the gap between spending and performance in your own business.
If you’re still unsure about how to implement strategies to close the gap between your digital marketing spending and performance, consider outsourcing your marketing to the experts! At Ekhos Agency, we are all about increasing your ROI. We’ll work with you to create a customised marketing plan that fits your budget and business goals, and we’ll implement strategies that will help you close the gap between your spending and your performance. Contact us today to learn more!