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Luova is Finnish for "CREATIVE"
Recently I ran a survey to 625 local business owners and managers. These were businesses of a wide variety, and the survey was short -- and probably not perfectly scientific -- but the results absolutely blew me away.
The businesses surveyed were local, meaning that, like many of you reading this article, they served a specific geographic region such as a town, a city, an area. People get in their cars to go to these businesses, or the businesses travel to the client. Like you, they’re chiropractors, dentists, acupuncturists, massage therapists… professionals who work in a geo-targeted area.
Here’s some of what I learned.
First, I was shocked to learn that 37% of those businesses surveyed expected only a 2X return on their marketing budget.
Spend $1 and get $2 back.
OK. Maybe good, and if I were trading dollars that might be all right, but consider that other kinds of investments (your retirement investments or your office equipment purchases, for example) you're expecting 5X or 10X or better return, right?
Why not expect a better return with your marketing dollars as well? After all, there is a direct correlation between marketing expenditure, and your bottom line.
Let's look at some examples.
Massage therapists: that new massage table you got? It cost $1500, but it improves how you can treat clients and enables you to give a better massage, and you can show that your clients are getting X, Y, and Z benefits after you upgraded tables, and therefore added new treatments?
Fantastic. Do you think that with that expense of a $1500 table you could increase your bottom line by $7500 (5x the cost of the table) because you can show that your clients will get such great benefit from your wise purchase? Pretty easy to make that leap, right?
Or, how about that $50,000 piece of equipment you got for your dental office? You want it to help you to make an additional $400,000 over the next 12-36 months, by improving the treatments, or the types of treatments, or the frequency of treatments you can give your patients. That's 8X return on that investment.
Demand that your marketing expenditure pay you as well.
Here’s my point with these simple examples: if you don't control your marketing and if you don't know where your business is coming from, you don't control your business. Period.
What really struck me, though, was that the business owners I surveyed, 50.2% of them had a monthly marketing budget only up to $2000, and as I described above, only expected to double their money.
What that tells me is that they aren't marketing, really. If they spent $2000 and only expected a two for one return on their dollars, these businesses are not maximizing their marketing budget.
They might be buying traditional advertising. Maybe they have really, really good referral marketing in place and don’t feel they need to do actual marketing (I have a strong opinion about this by the way because there isn’t a business on the planet that doesn’t need to be marketing in this day and age -- it’s a buyers’ market and businesses that aren’t marketing are NOT staying in the game), or they're skating along in some kind of a bubble that they may or may not have any control over.
How does your practice compare?
Recently, Entrepreneur Magazine published an article explaining the return on investment of content marketing. Hat tip. I found this explanation to be clear and helpful. Especially since another detail that the survey uncovered was that 68.9% of responding businesses shared that they handle their marketing in-house. They do the work themselves, rather than hiring it out.
That’s fine, if it’s working. I personally don’t think 2:1 is working maximally, but it’s not a loss. There’s plenty of room for improvement.
Additionally, too many businesses see the potential speed of the internet and figure their online marketing should move at the speed of light. My response to this? The best marketing uses long-term online engagement with your patients and prospective patients, your clients and prospective clients.
In other words, to be a market leader, to be THE go-to doctor or dentist in your town, you have to go to the virtual coffee shop that is Facebook, or Twitter, or Instagram, or YouTube, or wherever your patients hang out. Listen to and talk with them in the way that they want. And you have to do it more than once. And in all of the talking, you have to listen. And you have to listen well. And it takes a while.
For businesses producing your own content, here’s an article from Forbes that details this long-term path.
Back to expectation on return. The reason I would expect more than 2:1, the reason that I would want something closer to 5 times or 10 times return on dollars spent on marketing, is that a) I’ve gotten it myself and b) if you’re going to spend the time or if you’re going to have your employees or yourself spend the time, you should value your time more and do it right.
Don’t worry about if what you’re doing is social media marketing, or content marketing, or blogging, or vlogging, or whatever else. Actually, do all of this and do it often. You can call me if you need help with execution or strategy.
The trick of it is this: we’re in a buyers’ market. Buyers for all products and services can talk with each other, and share reviews and tell stories about their experiences, and can shop value in ways they just couldn’t eight or more years ago. Sellers now have to respond or fail.
With the right engagement, you’re in.