Managing your Marketing for Success in 2020
Written on: March 6, 2020 by Rich Carrione
At a recent association meeting, I found myself engaged in a conversation with a dealer about the best ways to acquire new customers after the heating—or should I say, after the “no-heating”—season. We talked at length about the tactics he’s employed in the past, the merits of digital marketing versus more traditional methods and the role that customer service representatives (CSRs) can play in the success or failure of an acquisition effort.
What became clear from our conversation, however, was that this business owner was going to struggle to find success. He was so focused on the tactics that he was missing out on the strategy. Like so many in this business, he was a “marketing tweener”—too small to afford a full-time marketing professional on staff, but not small enough that his business could be successful simply by word-of-mouth.
For those of you who might feel like a “marketing tweener” yourself, here are a few suggestions to manage your marketing and succeed in building or maintaining your business.
Know Your Numbers
I lost gallons last year, so I need to add customers this year is not a goal; it’s just a statement of fact. To be successful in this business—or any business for that matter—you’ve got to be able to identify the numbers that matter most, and that means knowing what your key numbers are.
How many customers do you want to or need to gain this year? Or how many gallons do you want to add?
Who is doing most of your selling: CSRs, outside sales, website sign-ups?
What is your closing ratio? In other words, how many inquiries does it take to acquire a customer?
Based on that ratio, how many leads do you need to generate in order to achieve your target sales number?
Answer these questions first and you’ll be well on your way.
Commit to a Budget
Once you know what numbers you need, you can begin to allocate resources to achieve them. There are a few ways you can go about calculating your budget. If you don’t have a proven customer acquisition cost, then your best approach is to establish your marketing budget as a percentage of your margin.
Committing to a budget helps to clarify what it takes to attain a customer.
The most important factor is that you treat your marketing dollars with the same respect as you treat other necessary expenses. How can you expect to grow if you don’t support the activities that will allow you to do it?
Best-in-class companies establish their marketing budget based on 5–6% of their gross margin dollars. If that sounds like too big of a leap for you, start at 3–4% and go from there.
Once you’ve established your budget, pay attention to your numbers. If you’ve ever watched the TV show Shark Tank, you know that’s one of the first questions they ask: what does it cost to acquire a customer?
Create Your Plan and Stick to it
You know your key numbers. You’ve identified your budget. Now it’s time to devise your plan. This is the part of the process that all too often becomes a cake-baking exercise. You take a little bit of what you’ve done in the past, add a little bit of what your sales manager thinks, include some online marketing because “everyone is online” and top it all off with something you saw a competitor do. If you use this approach, stop!
The creation of your marketing plan needs to be thoughtful and filled with strategies that have either been proven to work for your business with your customers, or have proven success for energy companies like yours. Your money is too valuable to stray from a winning recipe.
Next, you have to make sure that your team is fully aligned. Nothing will undermine your efforts more than spending resources and money on making the phone ring only to lose a prospect to poor salesmanship. If your CSR’s answer to what’s your price today is $X per gallon, you’ve wasted your money. If you don’t have the time or skill to train your CSRs, call in an expert. Customer service training can cut your customer acquisition cost in half!
The last thing to remember about your plan is that once it’s finalized, you’ve got to stick with it. You can add to it, or modify it, if conditions in your business change, but only do so strategically. If you are changing your plan on a weekly or monthly basis just because someone has come up with a “great new idea,” you’re likely to undermine your efforts and waste a whole lot of money in the process.
Track Throughout the Year
If you’ve come this far, you’ve got to see it through the entire way. All of your good work will be for naught if you aren’t able to look back on your performance and determine what worked, what didn’t work and what should be done differently for future success.
You should capture the results of your various activities in two ways—upon completion of each individual activity and in total (for the month, quarter and year). Consider creating a marketing calendar with a “results” section for an at-a-glance look at which activities delivered and which should be modified or dropped in future years.
A marketing calendar could help to pinpoint which initiatives worked—and which didn’t.
It’s not easy to grow in an ever-changing industry like ours. In fact, it’s downright difficult. However, if you adopt the recommendations laid out here, you’ll transform how you market, you’ll elevate your performance and you’ll significantly increase your likelihood of hitting your growth goals.
If you’re struggling to put all of the pieces together yourself, give us a call. We do this for companies all over the country and would be happy to help you set up a marketing planning and management structure for success. ICM
Rich Carrione is Director of Operations at Warm Thoughts Communications, the nation’s largest marketing and advertising agency dedicated entirely to the residential energy industry. Rich can be reached at 201-330-9276 x232 and [email protected].