Spending versus Investigating

test“Watson, I have been pondering something that seems to come up quite frequently with small businesses in relation to their marketing,” The Detective began.

“And that would be?” I interjected.

“Patience Watson, patience,” The Detective smiled. “What I have been pondering is the seeming reluctance of many small businesses to engage in active marketing,” The Detective paused only briefly here, seeing the puzzled look on my face. “Active marketing or interruption marketing as Seth Godin calls it, advertising, direct response mail, and lets throw pay-per-click in there. Instead too often, we go after what can be perceived as easy: passive marketing – Social Media, referrals, blogging, you know the variety of ways that you can, shall we say, ‘get the word out’.

“The issue is not that passive marketing is bad, but that it typically relies on you already having a tribe. What good is a blog in the short-term if you only have a few readers? Of course you hope they pass you on to others, but only a small percentage will do so, and if  the tribe is small, we are talking a small pass along as well,” The Detective stopped here for his characteristic pause for effect.

“An astute observation sir, but isn’t there a distinct disadvantage to active marketing?” I inserted into the pause, knowing mild praise and a question will always get The Detective moving again.

“Of course, Watson,” he said with a smile, accepting the praise and warming to the question. “Active marketing can carry a relatively hefty price tag and that is where I believe we will find the root of the average small business person’s hesitation.

“What we all fear is that we will spend vast amounts of money without results, and thus, that money will have been ‘wasted’.  Yet we believe we must cast a ‘wide net’. Our hope is that by reaching thousands we will find the proverbial needle in the haystack – our prospect. Sometimes, if the product and the market are appropriate, it can work. However, this requires a leap of faith; one not always justified and of course an outlay of cash, which we fear to waste, and a circle of doubt begins.

“Yet, there is another way, one which leads us to doubt conventional wisdom about ‘wide nets’.

“The answer of course is to test; but we must review the information from the test carefully. I myself ran such a test just in the past week. I ran a pay-per-click ad to a very narrow audience for a very niched product. I received a small number of views, and a very small number of clicks. So I expanded the audience ten-fold, received a phenomenal number of views, and a decent supply of clicks – which of course resulted in a further investment on my part, albeit a small one. Now what would be your initial reaction to this Watson?” The Detective asked at the end of his story.

“Why that the broader market was the better one, sir,” I quickly replied.

“Now what if I told you that I received nothing from any of those clicks? Even with copy that had resulted in positive results before,” The Detective smiled, springing his trademark “trap”.

“I’m not sure, sir,” I answered truthfully.

“Let me give you another clue, Watson. Analytics showed me that the people who clicked on the ad spent virtually no time on the page the click led to, even though the copy was directly related to the ad,” The Detective teased.

“I would have to say they were the wrong people sir, they had no real need, maybe they were curious, or even clicked accidentally,” I hesitantly ventured.

“Precisely Watson! Rather than supposing that pay-per-click is a useless marketing vehicle; which may yet be the conclusion – at least the pay-per-click sources being tested, instead, we can arrive at another conclusion – that the ad itself was faulty. Perhaps a bad headline, or imprecise text, which resulted in fewer clicks from our true audience.  Theories arrived at with minimal cost, and which can be tested with minimal additional cost,” The Detective summed up.

“And then if more positive results appear, we can decide to invest more money in the ad. I must say I like the sound of that sir!” I exclaimed.

“Elementary, my dear Watson, it is all in the data,” The Detective replied, turning back to his work.

 

 

Comments

  1. Another great post, Matt! I love the conversations Watson and the Detective are having. It makes this easy to read…and fun!

    In addition, the content about testing is “spot on” 🙂

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