An Executive’s Guide to Results-Driven Marketing

Today, you’ll learn to use total profits as the metric by which you measure the success of your marketing efforts.

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Result-Driven Marketing- An Executive’s Guide

One of my favorite elements of the digital marketing industry is the speed at which it is continually evolving. Whereas traditional marketing has remained largely the same for decades, last year’s cutting-edge digital marketing strategy might be this year’s outdated approach.

Staying ahead of the curve has never been so important, and many innovative marketers are taking part in a trend that you need to be aware of. In reality, this trend isn’t so innovative after all. It simply takes us back to our most basic business instinct, in that all business systems are a means to an end…a means to drive profits.

It’s called result-driven marketing (or profit-driven marketing). The overlying concept is simple:

Use total profits as the metric by which you measure the success of your marketing efforts.

This requires a shift in perception. Rather than marketing being perceived as a cost center, it becomes a profit center. Rather than focusing on efficiency metrics, update your KPIs. Realign your focus from buyer’s journey and budgets to what may, after all, be the most important metric you can track–profits.

What Makes Results-Driven Marketing So Effective?

A growing number of marketers are realizing considerable profit growth after adopting a results-driven marketing strategy. What makes it so powerful for these businesses?

A results-driven marketing strategy overhaul means reevaluating priority metrics. Rather than focusing on the cost and efficiency of your marketing strategy, budgets are adjusted to make funds available for ultimate profitability. The only thing needed to justify your marketing spend, however large it may be, is an increase in overall profits.

Traditionally, efficiency metrics are closely monitored as a way to boost ROI. In results-driven marketing, you may need to sacrifice your highly prized ROI figures in order to squeeze every last dollar out of an increased marketing spend. Where you may have focused your marketing efforts on the most optimized tactics that made the most of your budget and reflected the highest return, tactics and budgets are modified to allow for any and all activities that lead to an overall boost in profitability.

For example, you may be bidding on pay-per-click ads at a rate that makes the most of your predetermined marketing spend. In results-driven marketing, you would increase your bid in order to drive more clicks and more conversions. You may be spending $1-2 more per click, but the higher volume makes for an overall boost in profits.

The cost per conversion goes up, but if the number of conversions also goes up, your profits follow the same trend. While you make less per sale, the sales volume may increase to the point that it justifies the loss in profit per conversion. With proper testing, you can exploit new opportunities in this way in order to drive profits up across the board.

Adopting a strategy that prioritizes increased conversions, sales, and profits above all else can be an intimidating undertaking. However, when the proper evaluations are made and a powerful strategy is put in place you can make decisions that boost profitability while maintaining the security of your former marketing strategy.

This focus on the end goal above all else can mean the difference between a good year and a great year, meeting your goals and exceeding them. So let’s look at how it’s done.

Applications: CPC and Beyond

Results-driven marketing strategies are typically employed in the digital marketing channels of CPC or search marketing. Be it on Facebook, Adwords, or even LinkedIn, results-driven marketing is a powerful way to bring profits to new levels.

Google Guide illustrates this point well with a hypothetical comparison between search bidding mentalities.

Marketer #1 (efficiency-focused)

  • sets a limit of $8 cost per click (CPC)
  • acquires 30 customers
  • with a cost per sale of $80 each or $2,400 total

Each customer has an average value of $150, yielding a total profit of $2,100 ($4,500 minus the $2,400 campaign investment to acquire the 30 customers).

Marketer #2 (profit-driven)

  • sets a limit of $9 CPC
  • acquires 55 customers with the same $150 average value
  • with a cost per sale of $90 each or $4,950 total spent

Overall, this yields a total value of $8,250. As a result, the total profit for Marketer #2’s campaign ends up being $3,300.

As this hypothetical example demonstrates, the profit-driven approach can be beneficial for business growth if the value per sale remains fixed and there are no limits on the number of sales and profit-margin requirements are somewhat flexible. The extra customers and profits yielded by Marketer #2, despite the higher cost per sale, make a stronger contribution to the bottom line.

While most performance-based marketers are focused on driving the greatest profits from their paid online marketing, I’d encourage you to look beyond paid ads. You may benefit from making your content strategy profit driven as well.

Content marketing may not be as easy to track as PPC, but you can monitor the influence on your content spend on profit by changing one activity at a time. While implementing an increased budget on your blog posts, you would need to keep all other marketing activities the same.

It is also more difficult to immediately understand the long-term results of an increased content spend. While content promoted to your existing following or network may bring in noticeable increases in a shorter time period, it may also boost your organic search rankings and continue to drive traffic for months or years to come.

Understanding the lifetime value of your customer is extremely important when determining your long-term effects on profits. Once you know the lifetime value of your customers you can begin to calculate how the immediate boost will translate into future profits.

Results-Driven Marketing Website

While I’ve got you thinking out of the box, let’s take a moment to touch on another results-driven marketing opportunity: your website. No matter what you sell or who you sell to, your website needs to be focused on generating leads and buyers. Having an informative site that displays everything a visitor could ever want to know about your brand is a thing of the past.

Instead, you should be directing your visitors from the moment they arrive. You want them to be buying, so start moving them toward a sale from the word go. Get the picture?

When a visitor arrives, greet them with a landing page that offers a valuable guide for them to download. Reinforce your expertise with valuable content right away. Design your pages in a way that gives visitors everything they would need to know in order to buy in the least amount of time possible.

How to Implement Results-Driven Marketing

Explaining exactly how to successfully implement profit-driven marketing is beyond the scope of this post. That’s why I’ve taken the time to create an excellent (and very FREE) ebook that will help you understand the process step-by-step.

I may be a little biased, but I highly recommend it if you’re considering implementing a results-driven strategy. I’ve outlined the step-by-step process for executives and for practitioners, all in a way that makes it easy to understand. Here’s a very basic overview of what you get from the ebook.

In you’ll learn exactly how to:

Step 1 – Recognize Value

Understand the full profit return from your digital media investment.

Step 2 – Target Outcomes

Update the KPIs used to measure your teams to align the definition of success with total profits instead of CPA or ROI targets.

Step 3 – Capture Demand

Capture demand. Empower your teams with the resources and budget to engage every profitable customer.

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