The Good, the Bad, and the Leaky Bucket of Digital Marketing189 views
It’s easy to make excuses for being a bad digital marketer – here are some ways you can turn that around and be a good one.
In his book The Hard Thing About Hard Things, Ben Horowitz writes about good product managers and bad product managers. Apart from the fact that this is an excellent read for tech entrepreneurs, I’d like to use this notion to describe to you what, from my perspective, makes a good digital marketer and what makes a bad one.
Good Digital Marketers and Bad Digital Marketers
Good digital marketers know the market, the products, the product line, and the competition extremely well and operate from a strong basis of knowledge and confidence; they are the chiefs of marketing. A good digital marketer takes full responsibility and measures themselves in terms of the success of the customer engagement, and revenue generated, using data against set KPIs.
A good digital marketer knows the context going in (the company, revenue funding, competition, etc.), and they take responsibility for devising and executing a winning plan (no excuses!).
Furthermore, they know the technologies available to them, trends in the digital sphere, how to apply a clear strategy across the digital channels available to them, and most importantly, use smart investment of their budget to both acquire and retain their clients, because they know very well how much revenue their newly acquired clients generate and how much their existing clients generate.
They will know their customers, what they buy, and what they want. Oh yes, and the good ones will also know the profit margins on the revenue driven from new and existing clients.
To do this, they will drive a contextualized messaging strategy. They know how they want their clients reviewing them and are team players.
There are many more attributes, but I think you’ve got the point: It’s hard.
Bad digital marketers?
Well, bad digital marketers have lots of excuses. Not enough marketing budgets, the IT manager is an idiot, the competitor has 10 times more people in the marketing team, I’m overworked, I don’t get enough direction, the selling prices are too high and it’s not in my control, the website is too slow, we do not render well on mobiles and have low conversion rates, targets are fine but it is not my responsibility to be in charge of revenue…
Finally they don’t know their clients, or their competition.
Bad digital marketers think that all their revenue should come from the acquisition of new clients, because hey – that’s the easiest way to spend money and show some results.
They send the same message to all clients and do not personalize the customer journey.
The Leaky Bucket
In essence, bad digital marketers have a leaky bucket of revenue. They funnel in revenue from newly acquired customers in order to fill the bucket while spending tons of money on acquisition, but their problem is that they are doing a lousy job in retaining actual customers, who just hop on to competitors. So the revenue keeps gushing out of the bucket and they need to spend more money on acquisition just to refill to the same level.
What would you do to increase the revenues in the bucket? I bet the first thing you’d do is try to close the holes in the bucket with more spend on retention, and once this is done you’ll spend more money on acquisition – because you are a good digital marketer!
X-Raying Clients’ Revenue
Here are two theoretical examples of “x-raying” revenue from end consumers and attributing them to first-time purchase, second-time, and loyal clients.
In the graph below you’ll see that on average about 75 percent of the purchases are coming from first-time buyers (pink), and the very low percentage comes from repeat buyers – with time, the loyal customer base is growing, but it looks like this marketer isn’t investing enough time and focus on changing the proportions.
The pink layer will be very expensive revenue.
On the other hand you’ll see that in the second chart, in the beginning a lot of the revenues came from newly acquired clients but with time, their marketers made sure that the bucket was watertight. The holes were closed, revenue from existing clients is ever increasing, and at the same time smart dollars are invested into acquisition of new clients.
Now which one of the businesses has a good digital marketer?
Until next time.