Marketing is about testing. In this episode of “High Energy Marketing,” Tami and Joe talk about why testing is so important in marketing, how to come up with a testing budget, how long testing should last, ROI, and more!
Episode 9 Transcript:
Tami: Welcome to High Energy Marketing! A podcast with us, the digital marketing agency, Ajax Union, where we interview our CEO, Joe Apfelbaum, on key marketing topics and we share everything you need to know to properly grow your business online.
This is a Q&A podcast where we ask Joe questions about different topics and trends in marketing based on his book, “High Energy Marketing.” You can get this book and follow along with us at ajaxunion.com/book.
This is the ninth official episode of our podcast about High Energy Marketing, and today we’re discussing why testing is so important in marketing. But first, a little housekeeping. Go ahead and hit subscribe wherever you’re finding this podcast. And if you can leave us a review and give us a five-star rating, that would be amazing! But let’s move over to our inspiration corner.
Joe, do you want to hit us with a quick inspiration minute before we get started?
Joe: I would love to inspire the audience. Most people don’t realize this, but breathing provides us with oxygen. Are you breathing right now? Of course you are. If you’re listening to this, you have to be breathing. Breathing happens all day. And all night. And as long as we’re alive, we’re breathing. Most people, including myself, had no idea how to breathe in from your nose and out from your mouth. It’s much more effective than in from your mouth and out from your mouth.
If you have the right strategy to get more oxygen into your body, you’re going to feel more energized, more inspired, more motivated, and you’re going to be able to market your business more effectively. Remember to breathe.
Tami: Amazing. Thank you, Joe. So let’s move right into our first question. So today we’re talking about how marketing is about testing. What does that mean? What do you mean when you say marketing is about testing?
Joe: There are many parts of your business. You set up systems for it. Then you can measure if it’s working or not working. When it comes to marketing, in order for you to know if marketing is going to work, you have to test. Because marketing is about testing. It means that although you might want a result right now— ideally today— it’s very important for you to know what works, and what actually doesn’t work when it comes to marketing.
Depending on your goals, your target market, the messaging that you create, you’re going to want to see if your target market’s even interested in what you’re offering. You may have heard of the law of diminishing returns. Marketing is extremely important for you to be testing in order for you to be successful.
Tami: Oh, I’m not sure I’m quite following. What is the law of diminishing returns, Joe?
Joe: Sometimes you get a result when you’re doing marketing on a smaller scale. But as you’re increasing the scale, the more you market yourself, you need to continue to be testing. Because often, what you did to get your first 10 qualified leads is not going to help you be able to get 50 qualified leads during the same period of time.
For example, if leads cost you $1,000 each for the first 10 qualified leads. If you want to rapidly scale it to 50 per month, it might end up costing you $2,500 per qualified lead, because the tactics that you’re going to use might not be as profitable. That’s why it’s better to test in smaller increments and keep growing just to confirm that what you’re doing is working. Just to confirm that as you’re growing, you’re growing in a scalable, affordable way.
A lot of times people just want to bang it out the door and go crazy. But if you take the time to properly test, you’re going to know the best approach for you to scale. And they say slow and steady wins the race.
Tami: So, why is strategic testing so important when it comes to marketing your business?
Joe: When it comes to marketing your business, you have to rely on strategic marketing and strategic testing. Because, especially if your cost per acquisition is high, and if your lifetime value of a customer is high. If you have high-value customers that spend a lot of money with you, making sure that you have the right strategy and testing strategically is going to be key. Because you have to know what works and what doesn’t work in order for you to want to invest more.
Strategic marketing is about making sure that all the pieces are aligned together, making sure that you have the right target market, making sure that you have the right messaging to those people, making sure that you’re sending it to them at the right time in the right way in the right format. So getting yourself together and making sure that you’re strategically marketing will allow you to also eventually scale.
Tami: So, how do I come up with a budget for testing?
Joe: The way that you come up with a budget for testing is first to determine what type of result you want. I always say “begin with the end in mind” like Stephen Covey says in the “Seven Habits of Highly Effective People.”
Beginning with the end in mind means, let’s say you say I want to generate a million dollars of new business. Okay, well, what is each client worth? You say each client is worth $100,000. Okay, so you want 10 new clients? In order for you to get 10 new clients, what do we need to see happen in our business? In order for us to even have the potential to get 10 new clients, well, you might say we need to have 100 qualified leads. Okay, so in order to get 100 qualified leads, what can we afford to invest in those 100 qualified leads based on our margin?
We actually did a whole episode on coming up with a marketing budget. If you go back to ajaxunion.com/podcast, you can find it. The idea is to figure out over the course of a 90-day period of time what type of results do I need in order for me to continue this marketing campaign from a lead generation standpoint, from a conversation standpoint?
And the more clear you get as to what your goal is, what the end goal is, and what you could afford to spend on it, the more you can create a container where you can start testing more effectively.
Tami: Yeah, that last episode that we did, really dove into this. So I highly suggest you go listen to that one as well. How long does testing last for an average campaign?
Joe: I recommend testing every single day. But you want to be able to create a campaign that’s 90 days long. This way gives you enough time to iterate and to change. For example, if you’re spending, say $100 a day on Google, using their AdWords platform, each day that you spend $100, some days, you might get a result, some days you might not get a result.
But as you continue to test, you’re going to determine which words are producing a result and which words are not. And you’re going to lower the spend on the words that are not getting the results. And you’re going to increase your spending on the words that are getting you results. And the same thing is applied to other forms of marketing testing, where you start seeing what works and what doesn’t work. But you have to take the time to analyze.
Tami: Okay, right. But if you find success with one formula— let’s say you find something that works on a campaign—is it safe to say that you can recreate that element or that entire campaign that was successful, and duplicate it for another campaign, and it’ll have the same success?
Joe: Creating similar campaigns might work. And often we learn from one successful campaign what we can apply to another successful campaign. Let’s say, for example, we’re doing email prospecting. And we make an Account-Based Marketing list of potential companies that we want to go after. And it really works for that industry that we’re targeting. And now we want to go after another industry, we can take some of the elements that we learned from industry A and apply them to industry B. But it could be that industry B doesn’t use email the way that industry A does.
So, we have to look at all the different factors and determine the best medium to use in order for us to continue to get a return on investment with our marketing.
Tami: Speaking of return on investment, what’s one way that we can make sure that we always have conversions, and always get an ROI, even when we’re testing?
Joe: As you continue to test, you need to determine what success looks like, maybe you have a long sales cycle in your business, and you’re not going to get deals closed right away. But there are signals, there are signs that will determine whether the campaign’s going the right way and if people are actually clicking.
Are people actually entering their information? Are people actually engaging with your marketing funnel? Are people actually reaching out as a result of the work that we’re doing? And when we continue to do work, we see the responses, and we shift, and we modify our strategies to align with the current.
I was swimming in the ocean, they said, “Don’t swim against the current, swim alongside the current, let the current take you.” Make sure that you know where you want to go. And if you know where you want to go, you can use strategy to help you get there. And so if you want to be able to get an ROI as you’re testing, know what return means.
Set clear metrics, set clear KPIs that you could monitor on a daily, weekly, monthly, and quarterly basis to determine if you’re moving forward. And if you’re moving backward, try to figure out what’s happening there. Moving backward is not always a bad thing. Because when you learn, you’re actually making an investment. If you invest time into doing something and you fail, you learn something from the failure. So that’s not a waste. We learn a lot more from our failures than we learn from our successes because our successes can come from many factors, including luck.
But when we fail, there’s clearly a reason why we failed. And when you can learn from your failure, when you learn from all the times that you fail, that’s when you can start to scale.
Tami: Amazing. Thank you so much, Joe. This is amazing information. We hope everyone listening got as much out of this as we did. In the next episode, we will be talking about marketing funnels, so make sure to hit subscribe to catch that next episode. And you can find Joe on Instagram and LinkedIn @JoeApfelbaum, or find him on LinkedIn at joelinkedin.com.
If you didn’t catch that, you can check our description for all of our social media links. If you have questions, shoot us an email at firstname.lastname@example.org. Our music is by Michael Suarez. This podcast was produced by Sarah and Shannon. It is edited by Sami Mititelu.
Thank you for listening!