Using Offline Marketing to Complement Your Online Marketing

It’s my job to make sure clients understand the importance of developing a strong internet presence for their brand if they are expected to thrive in today’s consumer-centric environment. The focus of a small to medium business’ advertising budget should be placed on those initiatives. However, businesses should not forget about the benefits of offline marketing as a means to complement their internet marketing strategy.

When I analyze keyword statistics of a business I input the company’s brand name to see if web users are searching for it specifically. For example, if you own “ABC Adventure Travel” you should be curious to know if the public is searching for your company name. If they aren’t then you’re not doing your job in getting your name “out there” in a traditional sense. Brand recall ties into internet marketing directly. When the public associates your company name with a product/service of interest to them, the first thing they do is go online and perform a Google search on your company name. If your website if optimized, it will convert them into customers.

Here I examine how to use offline marketing to enhance the internet marketing campaign of your business:

1. Put on a Brand Face

Take advantage of physical branding opportunities such as making sure that your store front, company vehicle, employee uniforms, and/or company swag are “optimized” with your brand name and logo. These initiatives enhance brand recognition and recall for the public, ultimately sending them to your website when their need for your product/service arises.

2. Trade Product/Service for Ad Space

Offer your product/service in the form of gift certificates and the like to media channels with high traffic websites so that they can use your product/service as a promotional giveaway. Many online publishers will trade ad space for product (in lieu of cash) in order to have something of value that they too can use to attract viewers, readers, and visitors. Be sure to require that the media channel provides your company with a branded link back to your website.

3. Public Relations

Get your business involved with community programs and events and be sure to let the local media know. The altruistic benefits come first but nothing generates great publicity like being attached to a good cause. Your physical involvement will garner mention on the websites of reputable local media and result in inbound links to your website which has tremendous impact on your Google ranking.

4. Tie the Campaign into Your Social Networks

Create physical campaigns for your brand such as on-site (if you have a physical location) or street promotions (handing out product samples or discount coupons) that require those accepting follow, like, and/or interact with your brand on social media.

5. Tie the Campaign into Your Website

Create physical campaigns for your brand such as on-site (if you have a physical location) or street promotions (handing out product samples or discount coupons) that require those accepting either redeem the item/s back at your website or subscribe to your email list.

Conclusion

Remember that your website is the cornerstone of all marketing initiatives, traditional or otherwise. The customer will likely make their final purchase decision, and possibly the actual purchase if your website has ecommerce capabilities, based upon how well your website is optimized for conversion. Then, by using the aforementioned offline tactics you will have completed the circle of marketing life for your business.

Busted Myth: Direct Mail Never Works

If you ask Zach Graves of Carino’s Italian Restaurant in Meridian, Idaho about direct mail, he’ll tell you that this marketing strategy CAN indeed work. Over the last few months he has used two different direct mail strategies with mixed results. What the losing mailer lacked, the profitable one had.

In fact, it wasn’t even close! The end results showed a 32% overall response rate for the winning campaign! (32% is not a typo). Keep in mind that a 1-2% response rate for a direct mail piece is often considered successful and profitable… let alone 32%!

Some may argue, that more often than not, restaurants will see better response rates than just about any other industry. I consent, this may be true. But whether you are a restaurant or not, getting nearly 1/3 of recipients to respond to a mailer is awesome by any standards.

And no, this mailer was not sent to an internal or warm list. It was mailed to an average sized COLD list, which makes it an even more remarkable success. The recipients were not expecting anything from Carino’s nor did they opt-in to receive anything from the restaurant.

Here’s why the direct mail campaign worked so well:

  1. We made sure their mailing list was extremely targeted. I’m talking about a specific radius around their restaurant and a well-defined income and age range. We even planned the mailer to hit the mailboxes at precisely the right time, based around an event that was about to happen in the recipient’s life.
  2. A personalized letter was sent out and included a real, hand-placed stamp. Just a note… the losing mailer was one of those direct mail coupon books full of competing offers and ads.
  3. The offer was personalized and very generous, but not so much that it “ate up” the profits. In the end, the mailer still has to be profitable, right?

Think about it. Would you rather get a generic postcard addressed to you or the “CURRENT RESIDENT”, or a personalized letter and envelope in the mail arriving at just the right time? Of course, the letter, which in turn makes you more likely to respond to the offer inside.

Maybe you’ve tried direct mail a time or two and found that it just wasn’t profitable. That’s okay. But don’t make up your mind quite yet. Instead, maybe follow the lead of Carino’s and make your next direct mail campaign worth doing.

Calculating the Marketing Allowable – Or How Much to Spend on Marketing

Before starting a direct marketing campaign, managers often wonder, “How much should I spend on the actual marketing costs?” There’s actually a way to calculate this figure. You don’t have to guess, leave it to chance, or the whims of the accounting department.

Called the marketing allowable, this figure is a form of sensitivity analysis that gives you a good guestimate of the amount left to spend on marketing after the major costs are accounted for.

In order to calculate the marketing allowable, you’ll need a few numbers handy:

  • Net sales. If you don’t have your net sales figure, take your gross sales and subtract out the returns. That’s your net sales.
  • Variable costs: To figure out your variable costs, add together the cost of good sold by percent of orders, the fulfilment cost as a percent, and the bad deby percent, then multiply it by sales. Did your eyes just glaze over? Take a deep breath. You should know your cost of goods sold. If you don’t know your fulfillment costs, use a placeholder. Twenty percent (.20) is not unrealistic.
  • Overhead costs
  • Premiums: If you give away little items with every sale, like a free exercise DVD with the purchase of a home gym system, the DVD is the premium. The cost to make each is the number you’re going to use to determine your marketing allowable.

Marketing Allowable: The Formula

The formula to calculate the marketing allowable looks like this:

Net Sales

- Variable Costs

- Overheard

- Premium

= MARKETING ALLOWABLE

What It Looks Like with Real Numbers

I’ll plug in some numbers now from a real client, who has graciously given permission for me to use their numbers as long as I don’t mention the name of the business. It’s a small, family owned e-commerce business selling gift items.

Net Sales: $48,000 (rounded out for our example)

- Variable Costs: $11,000

- Overhead: $28,000

- Premiums: $1,000

Marketing allowable: $8,000

So technically, this client is “allowed” or can spend about $8,000 on direct marketing to obtain $48,000 in net sales. Remember that I kept the numbers small and nice and round so they would be easy to follow. In truth, a company generating these revenues would need a much higher net sale figure to pay a salary – which I’d include in the overhead line as part of the operating expenses of the company.

When to Use Marketing Allowables

Calculating the marketing allowable isn’t just a subtraction and decimals example, even if you have to work some decimal magic on the variable costs line. It’s actually a useful tool for budgeting. if your company does zero-based budgeting, the kind where you have to justify your spend from the bottom up for each fiscal year, you’ll want to know your marketing allowable for the product or product category. You can easily run some figures and adjust amounts in the spreadsheet for the premiums, for example, or the overhead costs, and see how it impacts the marketing allowable.

Remember that marketing numbers are rarely fixed in stone. One of the benefits of placing these numbers into a spreadsheet and playing around with them is watching how changing one line in the formula impacts others. For example, if you can keep your overhead nice and low, look at how much is left to funnel into marketing. And if you could funnel more money into marketing, how many more potential customers can you reach? Conversely, if you up the premium amount and offer a spiffy DVD player with that DVD, you may have less for marketing, but if you test that concept and it pulls in more sales, it can be a winning combination.

Direct marketing is all about measurement. Math is the language of reality, and direct marketing, so heavily based in math, takes nebulous marketing concepts that scare CEO’s and makes them real by adding dollars, cents, and sales to the conversation.

So calculate your marketing allowable today, and play the numbers out. Maybe there’s more in your marketing budget than you thought!