The ultimate goal of any marketing effort should be ROI. If digital marketing isn’t making money for your business, it means your digital marketing isn’t getting customers’ attention. At this point, it’s best to develop a new digital marketing approach.
Clicks and conversions are great, but your business won’t make money directly from conversions and clicks. Sales are what generate revenue.
With that in mind, the first thing you should determine before deciding what your qatar number data digital marketing budget should be is how much revenue you want to generate. This will help you decide how much you will spend on advertising to reach your revenue goal.
2. Who are you marketing to?
The next step is to determine who you are marketing to. This is very important because different buyer personas require different marketing tactics. And, even more importantly, different buyer personas become different types of buyers.
If your company has decided to create a sales team, asking them for insights about customers is the quickest way to get a clearer buyer persona while collecting data to develop your digital marketing strategy. After all, the sales team is the one who talks to customers the most.
However, simply talking to your sales team and doing research isn’t enough to get the level of detail you need to create an effective digital marketing plan. To do that, you need to pick up the phone and call your customers. Even if your customers tell you, “Your company showed up on Google for me and I clicked on it,” that’s valuable data and gives you feedback that your digital marketing strategies are working to a certain level.
Ask them how they found you, why they converted, and what made them buy your product or service. This information will give you a ton of insights into your marketing and sales process. Learning this information will improve the performance of your ads and determine your marketing budget.
3. How much are your customers worth?
People often look to buyer personas as a good way to develop an effective digital marketing strategy. Buyer personas are great for this, but they are also important for developing an effective digital marketing plan.
For example, imagine you are advertising for a SaaS company that has the following pricing setup:
$25, Small Business
$75, Medium Business
$150, Large Company
A small business has much smaller needs than the other two, so it would probably choose the $25 starter package. A mid-sized business would probably choose the $75 professional package, while a large business would probably choose the $150 enterprise package.
An example to keep in mind when determining how much your customers are worth:
The lifetime value (LTV) of a customer who spends $500 per year on services from your company has a higher LTV than a customer who spends $1,500 per year on services from your company. It’s tempting to focus your efforts on large enterprise-level customers, as they bring in more money per purchase. However, it’s more worthwhile to invest in finding and retaining small business customers than large enterprise customers.
Considering that the average buyer personas are your customers for an average of 14 months, four years or nine years, respectively, and purchase 5, 20 and 100 licenses, respectively, below we have the lifetime value for each of these personas ([licenses/month] x [number of licenses] x [typical customer lifetime in months])
Lifetime value
Small Business: $1,750
Medium-sized business: $72,000
Large Company: $1,590,000
These numbers are eye-catching, but not all of them are profit.
SaaS companies spend about 22% on support, 9% on sales, and have a 40% overhead, leaving them with 29% of the LTV of each customer. This means you have to spend less than the following to get customers from Facebook :
Maximum Acquisition Cost (MAC)
Small Business: $507.50
Medium Business: $20,880
Large Company: $461,100
If you can keep your Customer Acquisition Cost (CAC) below this amount, you will make a profit. If it costs more to acquire these customers, you will lose money.
Of course, the market is unlikely to be full of large businesses, so you’ll need a mix of business sizes to hit your revenue target. This will dictate your Facebook budget . Businesses often find that the LTV of mid-sized business customers outperforms that of large businesses. In response, they shift their digital marketing campaigns and direct their ad spend toward acquiring and retaining a small business customer base.
