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Do you know where to invest your marketing budget to drive growth? Here's why keeping your marketing hyper-measurable is key to delivering results.
For the first time in 10 years, 2018 saw high-growth firms spend more on marketing than companies that had flat growth. This was the finding of Hinge Marketing’s latest annual High Growth Study which involved more than 1,000 companies. The survey revealed that one in five high-growth firms are investing 20% or more of their annual revenue in marketing, and digital and content marketing are playing a critical role.
Ensuring that your marketing keeps up with your company’s overall pace of change is one of the key challenges for hyper growth companies - defined by The World Economic Forum as those maintaining a 40% or higher average annual growth rate for more than a year. There is no one-size-fits-all answer for every business enjoying this stratospheric rise, but there are some methods that prove repeatedly successful.
The first is to secure the confidence of the board with some quick wins. One of Mediablaze's clients, a telecoms provider, has grown from a standing start into a £70 million business in just one year. It's a case in point. With just 1% of turnover earmarked for marketing investment, its CMO needed to not only get maximum bang for her buck, but demonstrate the effectiveness of digital marketing to secure further budget. After all, most clients would typically be allocating a far heftier 5% to 7% of turnover to marketing.
We began by taking the company's spend to work out a multiplier. The company is largely trying to cross-sell to existing customers who trust it and like its products and are therefore receptive to further marketing. We built a strategy around email and content marketing, for which B2B marketers can often see a very healthy £30 to £40 return for every £1 spent. We succeeded in achieving a high multiplier to enable the CMO to quickly prove the value of digital marketing to the board and, ultimately, to unlock further budget.
Make your marketing hyper-measurable
Starting small and making your marketing hyper-measurable is key, particularly for content marketing aimed at raising awareness, which is a slower burn. Delivering results little and often to maintain and build the confidence of senior team members will certainly help to prove your case.
We recently worked with an e-commerce retailer which needed to use digital marketing as a lever to turn around its sales. Again, we used a data-driven approach, analysing the company’s existing marketing activity across various channels to identify areas of weakness and highlight blind spots, before experimenting and testing to prove that our assumptions were correct.
It is this willingness to test and learn - and to fail - which is key to marketing in hyper-growth businesses. It is also an area in which many legacy companies need to improve. Hyper-growth companies have a culture of experimentation, and digital marketing lends itself well to this positively agile approach.
As John Veichmanis, CMO of the online retailer Farfetch said at a round table discussion we held recently, the company runs around 1,000 growth experiments each year. Only one in every 10 produces a positive result. Embracing this idea that nine out of 10 things won’t work is essential to progress.
Mediablaze is currently working with AfterShokz, a company that makes bone conduction headphones. We began by creating Facebook ads aimed at driving keen runners to the website’s product pages, but conversions were disappointing. We then created bespoke landing pages with content specific to running, meaning the user journey is much simpler and clearer. Conversion rates skyrocketed.
Where are you investing your marketing budget?
Knowing where to invest your marketing budget to drive growth relies on robust testing and learning for every channel. It means building a picture and interrogating the data to see where the anomalies lie, before drilling in to make the necessary changes.
As is demonstrated by AfterShokz, personalisation is proven to push people further along the purchase journey. Hyper-growth companies need to be investing in this, and it doesn’t have to be scary. There are many simple ways of doing it, such as dropping a cookie on the website, so the next time that user returns you can deliver a more personalised experience.
Look at global hyper-growth travel start-up, Culture Trip, which raised $100 million in investment in 2018. It has plans to supercharge its marketing this year, and one of its big drives will be personalised email newsletters based on the content people have interacted with on the site. Highly relevant, bespoke content is an expectation of today’s consumers.
As the Hinge survey reports, high growth firms are at least 50% more likely to realise results from digital marketing techniques than no-growth firms. It is about being agile, and using data to constantly inform your direction. And remembering that failure often comes before success.
Talk with a digital agency that understands hyper-growth
Have more questions? Feel free to reach out to Roger Barr, the author of this post. He would be happy to talk with you about hosting a hyper-growth masterclass at your office, (that's funny to us because he's 6'7").