How To (And How Not To) Allocate Your Marketing Budget

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In this recent post on the Small Business Branding Blog,?Yaro Starak relates the tale of how he blew $500 (a large proportion of his marketing budget) on an event sponsorship that seemed promising, yet produced zero results for his student editing and proofreading business, www.BetterEdit.com.

This scenario of a business blowing a large proportion of their available marketing budget on one “do-nothing” marketing activity is one that I’ve seen more than a few times.

In fact, several years ago I was working for a Japan-based direct marketing (mail order) company that marketed a best-selling skin care range. We made a deal with an importer in Hong Kong who wanted the exclusive licence to market the products in Hong Kong.

When I looked at our Hong Kong partner’s launch budget, alarm bells started to ring. Large sums of money had been allocated to high-profile image ads and an endorsement deal by a well-known local actress.

This runs totally against the mail order ethos of testing conservatively before committing large sums of money.

Sure enough, the launch went ahead and there was an initial sugar-rush of sales (albeit made at a considerable loss) followed by very poor follow-through sales.

Before long our partner had exhausted their whole marketing budget and were looking to purchase stock on consignment because they didn’t have the cash to pay in advance.

Moral of the story: Never commit a large proportion of your marketing budget on any untested marketing activity.

How to Launch a Business

To cite another example, a fellow with a startup business contacted me today to enquire about some marketing options. He had initially decided that as an initial step he would like to try a direct mailing, followed by online marketing once he gets some cash in the door.

We reviewed the figures to see how this could work. Here is the approximate costing of a 1,000 piece direct mailing….

• List rental (setup $250 + $300 per 1,000 names) = $550
• Postage = $500
• Paper, Printing, Envelopes = $500
• Professional copywriting = $600

Total cost: $2,150

Hmmmmm…this isn’t looking like such a cheap test after all for a micro-business with not a lot to spend up front.

Furthermore, I’ve seen a number of direct mailings like this crash and burn because the list was no good. An old, over-mailed list will kill your mailing dead, and there’s no way to know the quality of your list until you mail it.

All of a sudden, the “expensive” alternative of a internet marketing doesn’t look so expensive. For this type of business, my company can set up a website, write the professional sales copy and set up traffic-generation campaigns for a total investment of around $3,000.

Plus, we provide a money-back guarantee. In other words, if the website we set up doesn’t at least pay for itself within 6 months of going live, we refund any shortfall in cash (show me a list broker who’ll do that!).

What’s more, with online marketing, you get a second chance. Even if your initial results aren’t as positive as you’d like, there is plenty of opportunity to tweak your website in order to boost your results. With direct mail, you don’t get this second chance unless you spend the same amount of money again.

Don’t get me wrong – direct mail can be a great marketing tool. But as an initial do-or-die test, I’d normally advise against it, unless you really know what you’re doing.

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Blogging as a networking tool

In a previous post I talked about the development of this blog. It’s now been around 6 months since then. So I thought it would be a good time to talk about some of the tangible results I’ve experienced from blogging.

So far my blogging activities have produced relatively little in terms of lead generation results, but there are some positive signs on the horizon. The key outcome thus far has been forming new relationships with other like-minded entrepreneurs.

Over the last couple of weeks two readers have contacted me via this blog and we’ve either met in person or chatted on the phone as a result.

Steve Woodgate is CEO of Brisbane-based software and systems integration firm Eyecon and David Koopmans is principal consultant of Mokum Marketing, a Melbourn-based marketing consultancy.

I can see plenty of potential to form new relationships through this blog and other blogs, some of which will no doubt turn into friendships and business relationships.

Other Benefits

The other benefit that I can see so far is increased exposure to new traffic sources. Although my main site has very good search engine rankings for certain key phrases, it’s always difficult to rank well for a wide range of related phrases.

Blogging may allow me to build up a store of keyword-rich content that can broaden my exposure in search engines, though I have to confess that I’m yet to see that effect.

Building a blog

From what I’ve seen so far, building a blog is hard work. You put in hours in the early stages writing content that very few people read. But eventually you get some traction and it all begins to pay off – hey, it’s just like LIFE!!!!

Of course, there are other benefits to blogging besides the purely business-related (e.g self expression). When I do get a chance to write a blog entry I enjoy it, although I hope the process will pay off in other ways in time.

L8r.

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Disaster Narrowly Averted!

Yesterday I had an email from one of my website visitors who tried to sign up for my introductory online lead generation course. He informed me that when he tried to sign up he was taken to a “webite URL expired” link.

That seemed pretty strange to me so I went over to the website and did a test submission and sure enough, our online forms were broken!

The reason was because my online newsletter system is managed by a .php script connected to a 3rd party service, and that script resides on a separate domain, www.Marketing-Results.com (without the .au at the end). On the 8th May that domain expired, effectively switching off my email newsletter.

This came as a surprise because I have all my important domain names on “auto renew”, and I had not received any reminder emails (methinks it’s time to change services).

Looking back through my email records, it all started to make sense – I hadn’t had a single registration for about 5 days, which is about the time when the domain went down.

At first I thought that the domain name had been “sniped” by an automated service such as www.pool.com, which features an option for nabbing domains as soon as they expire.

But with a little advice from my project manager Phil I eventually succeeded in re-registering the domain. As soon as the domain name delegated our newsletter service was back online.

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How to choose a great domain name

Here’s a quick off-the-top-of-my-head article on how to choose a great domain name.

A great domain name is one that:

1. Is easy to remember
2. Is easy to spell
3. Communicates something about what you and how you benefit your clients
4. Produces high response rates in pay-per-click ads and other ads
5. Is credible

But shucks! All the good domain names are taken!

I don’t know how many times I’ve heard that “all the good domain names are taken”. With a little thought it’s actually quite easy to come up with a good domain name that is still available.

If you’re a local business, consider a domain name that contains your location such as www.SydneyBookkeeper.com.au [obviously a Sydney-based bookkeeper] or www.JapaneseBrisbane.com [a Brisbane-based Japanese school].

However, if you also deal with clients outside of your area, avoid a location-specific domain name, unless you’re using multiple domain names for different regions or market segments.

.com, .com.au, .biz or???

For Aussie-based businesses, I recommend .com.au domain names. If the .com version is also available then get that too, because people sometimes forget to type the .au on the end.

The cheapest place that I know for registering .com.au domain names is Cheap Domains. At the time of writing it costs $38 for a 2 year .com.au registration (compared with some other companies who provide exactly the same service for $140 or more!).

In general, I recommend that you choose a .com or .com.au domain name. These have the greatest credibility. I recommend against .biz domain names – they have a fly-by-night-pyramid-scheme ring about them.

A dash in your domain name is also OK, such as…

www.marketing-results.com.au

…but avoid too many dashes:

www.ultimate-work-at-home-making-millions-in-your-pajamas-income-scheme.biz

They erode your credibility.

A couple of years ago, there was a search engine benefit to having dashes in a keyword-rich domain name, but this no longer exists. The search engines have become smarter at discerning the individual words within domain names.

Make your domain name speak volumes

A domain name that telegraphs something about your product or service can be a real asset.

For example, my company name is Will International Pty Ltd (yes I know, that normally gets a few chuckles) buy my “trading name” is Marketing Results.

On Adwords, if I split test the display URLs

www.WillInternational.com.au

vs.

www.Marketing-Results.com.au

…the second one produces a significantly higher response. That’s because it communicates a benefit associated with what we do.

I recommend that you test a few domain names against each other before you making your final decision – the right domain name can be worth a bucket to your business, for the reason that it can attract more of the right prospects to your website better than the alternatives.

Your domain name DOESN’T have to be your company name

Many company names don’t make very good domain names. That’s fine – choose another name.

Company names that are acronyms (e.g. www.afgs.com.au) make poor domain names. They don’t communicate anything about what you do and are often hard to remember.

Why did you choose the domain name you did?

If you’ve read this far, why not leave a comment about your domain name and why you chose it? Non-spammy domain names with sensible comments will be left as a backlink to your site.

Bests,

Will

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Example of a Well-Positioned Business – Dilmah Tea

There’s an interesting article in the latest edition of Wealth Creator magazine about the founder of Dilmah Tea, Merill J. Fernando.

Apart from enjoying a cuppa of Dilmah Tea on a regular basis, I’ve always admired Dilmah as a well-positioned product.

What does “well-positioned” mean?

To me, it means, clearly differentiated from competitors and focussed around a single, appealing idea.

Dilmah’s USP [definition: Unique Selling Proposition] is encapsulated by the tagline, The Single Origin Tea.

Now a tagline alone does not a USP make. Dilmah goes much further, fleshing out their commitment to the perfect cup in myriad ways.

For example, each box of Dilmah tea contains a folded insert that explains the care that goes into the sourcing, packing and delivery of every cup of tea.

The website features some great copy too. Here’s an exerpt:

Dilmah is the product of a lifetime devoted to tea. Founder of Dilmah, Merrill J. Fernando embarked on a quest to bring quality back to tea when in the 1950s, he witnessed the concentration of ownership in the tea industry into the hands of a few large corporations and as a result, the ‘commoditisation’ of tea. As one of the first Ceylonese to have the opportunity to be trained in tea, Merrill harboured a dream since his initiation in the world of tea, to launch his own brand of tea, and to offer consumers the choice of something truly different. His dream took over three decades to come true, and in 1988 he launched his own brand – Dilmah, coined from the names of his two sons Dilhan and Malik. Dilmah introduced lovers of fine tea to the concept of tea ‘picked, perfected and packed’ at origin. Being owned and managed by a tea producer, Dilmah is also a role model for producing countries. Merrill pioneered the concept of ‘Single Origin Tea,’ choosing to remain faithful to Ceylon Tea, acknowledged the finest tea on earth.

Essentially, this is really just “About Us” sales copy – but look at the different strands that are woven together into a captivating product story…a lifetime devoted to tea…struggling against the corporate hegemony to fulfil a dream…the family story behind the name…a model for developing countries…remaining faithful to Ceylon Tea….

This passage oozes with authenticity – so often missing from most marketing communications and something so difficult to convey well. As soon as you try too hard, it slips away.

Almost every day, I’m reminded of how important a strong USP is to the success of any marketing project. A great USP with average execution can succeed, but a weak USP with superb execution often tanks.

To make your marketing work better (without spending any more money), consider re-thinking your USP.

Will

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