Why Business Fail At Online Advertising.
Advertising, in general, is not easy. You are investing in a program that is focused on bringing you a positive return for your money spent. This is the same concept as the stock market and we all know that to be truly successful at the stock market you need to put in the work like Warren Buffet. The beautiful thing about investing in advertising is when you find a working formal you can scale your business to as large as you desire!
So, why do most businesses fail in online advertising? They do not understand how to create a full advertising funnel and they don't know what type of returns their money should be getting. Let me break this down in a step by step funnel system that applies to ANY business.
Step 1: Attracting New, Or Cold, Customers - This is the act of reaching out to customers that have not connected with your business before. In the past, this was done through street signs, billboards, newspapers, direct mail, radio, and TV. Those platforms work but they are very hard to track and you can not exclude your current customers from seeing these ads, meaning you will pay to bring the same customer in time and time again. Today's online advertising allows you to directly target customers in your area, track exactly how many people see and engage with your ad, and allow an easier process for the customer to connect with you. With online advertising, this form of advertising should be informative but not too pushy. You are simply putting your business out there to the world and tracking anyone who has an interest. Some numbers to look at, Facebook averages $8 per 1,000 views depending on your business, and Youtube averages $0.01 per 10 seconds of video viewed.
Step 2: Increase Conversion Of Interested Customers - Every customer that clicks or engages with your ad has some form of interest in your business but not all customers that click buy. This is just like you driving down the street and seeing a billboard and going "I want that" but not calling or connecting with the business. With the billboard example, we can not track the customer's interest and it is very difficult to reconnect with that customer specifically. With online advertising, we can track every customer that hits the website but does not buy and retarget that customer with a different advertisement. These ads should be a little pushier, with an offer or incentive for the customer to take action. You can be a little pushier because the customer already showed interest!
Step 3: Increase Lifetime Value Of Current Customers - So the first two steps help you close the customer and make money! Awesome, so what is the next step? Next, you need to increase the overall value of that customer to your business. For a service business, this would be upselling other services, getting reviews, and getting referrals. For restaurants or retail, this would be getting the customer back to make more purchases. With physical advertising, these three steps are all clumped into one, but with online advertising, you can separate your customers and talk to them specifically so your ads resonate with them. The more your ads resonate with the customer your talking to the higher chance you have of winning that customer. These ads should be more engaging and friendly getting customers to comment or share your ads so you develop a strong word of mouth. Yes, word of mouth is developed online now. P.S. You can do this step without spending any money on advertising and we can show you how!
In conclusion, your business needs to account for all three of these steps to find a positive return for the money you spend on advertising. If you are not attracting new customers, engaging with interested customers to sell them, and following up with current customers to increase their value you will be spending money without a strong return!