Always be Testing
When I’m talking to clients, one particular topic often comes up that I don’t understand. I could be talking to somebody who invests heavily in paid media, for instance, and I want to suggest trying a new marketing strategy.
They’ll hear me out… Then they’ll tell me their marketing campaigns are already working well. “Why would we take budget away from that?”
Most of the time, this line of thinking comes from having a fixed internal marketing budget set by the company.
Spending 10% of the marketing budget on trying new strategies
Let's say your company has a monthly target of 2,000 bookings, and they make a C-level decision to set a $100,000 per month marketing budget to hit it.
Based on previous sales data, you know you can hit those booking numbers with your $100,000 budget in a tried and tested channel. For example, you know you can do it in Google ads with a Performance Max campaign. But you’ve never tested a Dynamic Search Ad campaign.
Why not take 10% of the budget and spend it on dynamic search ads? Business owners often turn the idea down, because they need to hit their booking targets and they don't know for sure that it's going to work.
That’s perfectly understandable… You've got a reliable channel and a trusted marketing strategy that's generating enough monthly bookings.
The risks of not testing new ideas
If you're not testing new marketing ideas on an ongoing basis, you’ll lose out if your sales environment becomes more competitive.
A new company could enter your market with private equity or venture capital funding, and start investing more heavily on the exact same terms you're focusing on.
If they’re willing and able to spend more to acquire those customers, it catches you out - because you weren't testing alternative strategies. You have nothing to pivot to!
The rewards of trying new strategies
Alternatively, you could spend $90,000 of your usual $100,000 per month marketing budget, and generate a respectable 6x return on ad spend.
But…
You could then take the remaining $10,000, test two new strategies, and generate a remarkable 10x return on ad spend.
So spend that magic 10% wisely!
By not spending that magic 10% of the budget on testing new ideas, you’re:
- making yourself very vulnerable to market changes
- missing opportunities to find new outlets that could drive meaningful bookings and revenue
The message is clear; test, test, and test again.
10%.
- Brennen Bliss, CEO @ Propellic
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