As marketing plans for 2010 begin to take shape it will be more important in this new market reality to show measurable return on investment than ever before. The economic environment could be better. Evaluating and implementing industrial marketing programs specifically aimed at generating qualified sales leads that turn into business is crucial.
2010 marks 17 years since commercial providers were allowed to sell internet connections to individuals. Since that day in 1993, we all know that internet use has grown exponentially. We are now starting to see that online marketing programs can be as, or more effective, than traditional marketing at trade shows or in industry publications. There are several reasons for this change in the industrial sector which include search engines make it possible to find what you need immediately rather than waiting for a show and the costs associated with exhibiting and going to a show are very high.
Today a significant amount of sourcing is done online. Getting your marketing "online" isn't a strategy by itself. There are quite a few different options when it comes to online and the best way to figure out what works best for your business is trial and error. The exciting part about the internet is it is very easy to measure your effectiveness and you can run smaller experiments to later stop the ones that don't work and increase spending on the ones that work well.
The function of a marketer in an industrial company is typically to generate sales leads so they sales team can have the opportunity to close deals. In this situation being able to quantify your sales pipeline and demonstrate the effectiveness of each marketing effort is critical to be able to allocate funds effectively and demonstrate to yourself and senior management the best way to grow the business. By emphasizing measurement and return on investment (ROI) you put yourself in a position of control. To break this down into simple terms you might think about this as a funnel or waterfall.
For example a typical trade show marketing investment might look like this:
1. Initial investment in booth real estate, physical display, travel, meals, hotel, marketing materials - $50,000
2. At the show you might generate 250 leads over a 3 day period - $200 per lead
3. You'll follow up with all 250 and find out that 25 of them are interested in your services and worth sending out a salesperson which costs another $1000 per trip $25,000
4. After the sales meetings you will be able to determine the conversion rate for this approach.
Demonstrating this kind of command over the numbers will help you evaluate which is the best approach for your company.
The popularity of the internet should cause you to consider investing in an online campaign. Earlier this year comScore, Inc. (NASDAQ: SCOR), released a study showing that more than 113 billion searches were conducted globally in July 2009. This represented a 41-percent increase versus year ago. Google Sites attracted significantly more searches than any other engine with 76.7 billion.
If you choose advertise with a search engine you will be paying per click. The search engines offer you software tools that help you analyze and tune your campaign. For example:
1. Consider the same $50,000 you could set a daily budget of ~$150 for your ads.
2. If you run them for 2 weeks you will have spent $2100.
3. At the end of those two weeks you need to have somewhere in the neighborhood of 20 leads.
4. After your sales people follow up with these 20 individuals you will get a sense of the conversion for the search engine channel.
If advertising in a search engine is as effective from a conversion perspective as going to a trade show you could have a conversation with senior leaders about investing additional funds into this approach until your conversion changes. Your measurements will give you a higher level of confidence that investing marketing dollars in this channel will grow your business.
Industrial marketers that are not interested in making as large an upfront investment in advertising or trade shows should consider creating a free product profile on www.inventables.com.
The free profile will introduce your product to technical buyers, engineers, and sourcing professionals that visit Inventables at no financial cost to you. If the prospective customer is interested they complete the short form on the right side of the page. There message plus some qualifications including their company name, size, and the stage of their project will be sent to you. At that time you will be able to evaluate if this sales lead is worth your time and purchase or pass. If you purchase the lead you will be immediately given the customers contact information. If you pass Inventables website learns that you didn't like that lead and will adjust your profile in the hopes of presenting your product to potential customers that would be worth your time to speak with.
With this final approach the measurement is even simpler.
1. Upfront costs $0
2. Cost per lead - each one is different based on it's qualifications and the day's market rates. Currently leads are selling in the range of $1-$200 however it fluctuates every day due to supply and demand.
3. After your sales people follow up with 20 leads you will be able to determine the conversion on leads from Inventables.
With all this useful data in hand you will be able to compare the conversion rates for each approach with your management team and determine the most effective way to allocate your budget to best grow your business.