Where should a business focus marketing spend?
Longer-term brand building, or more immediate performance marketing and conversions?
The answer to this is that investment should be made throughout the entire funnel.
All too often, small business owners concentrate on short term wins and revenue generating activities. In this situation, the budget is typically spent on performance-based marketing to catch the low-hanging fruit and generate revenue and profit.
So you’re saying we shouldn’t try to chase sales?
No, that’s not what I am saying.
Of course, as part of an integrated marketing mix, the latter stage activity should be carried out. For example, retargeting and automation to go for the conversion.
The point is, that if a business is solely focussed on ROI or ROAS, it will inevitably overlook the bigger picture.
To help you to visualise this concept, I love Mark Ritson’s analogy about a healthy tree.
Only by watering a tree will it continue to deliver fruit. If we just focus on picking the immediate fruit, and not investing in the growth and sustainability of the tree, the fruit will decrease in time.
Why do SMEs often ignore the long term marketing?
Top of the funnel tends to be associated with the awareness stage of the buyer journey.
Longer-term brand building in this phase tends to be neglected as it is harder to quantify results. Compared to some marketing channels, conversions can’t be directly attributed as easily. So with a view to good budgetary control and reporting, these higher-level activities may be perceived as ineffective or inefficient in driving the conversion.
This is true, to an extent.
It is harder to equate a sale or sign up directly to a campaign designed to raise the general reach of a brand, especially given it may take months or years from initial awareness to purchase. Investing in brand awareness at the top of the funnel, however, is how customers discover a product.
People can’t buy a product or service if they don’t know that it exists. The top of the funnel brings a product or service to light in the customers’ eyes and is designed to cast a wider net and build trust, which converts awareness into sales toward the bottom of the funnel.
When thinking about brand awareness think research, PR, social media or content, as just a few examples, as part of a wider vision of how the brand will grow.
Business needs both short and longer-term marketing
It is proven that investment into brand-building activities at the top of the funnel is essential for marketing to be successful.
True, reach and awareness are harder to report on, and an ROI calculation will be less straightforward. But, these campaigns are vital for casting the net wide high. It’s how you attract new customers to a brand, allowing activity later on to concentrate on conversions.
Businesses need to invest in the top to get to the bottom. In fact, expert, Binet advises brands to establish a budget of 60:40 brand building to sales activation ratio. This might shock, and even make many small businesses feel uncomfortable. But this man knows what he’s talking about and bases this on results across 1000s of businesses successes and failures.
Remember the tree.
A tree will only produce an abundance of low hanging fruit, if the tree itself has been well nourished.