4 Steps to Implement and Improve Performance Marketing
To say this has been a challenging year would be an incredible understatement. The lives of our friends, colleagues, and customers are forever changed, and all the while, most marketing strategies were put on hold. The economic impact will have long-lasting effects that we won’t be able to articulate for some time to come.
Finding ways to recapture lost income and revenue will likely depend on how well the job market recovers. Similarly, the impact on buying power and consumer behavior will continue to be unknown, but all consumer-focused marketers will need to keep these macroeconomic effects in mind.
To focus on strategies that increase sustainability — rather than short-term solutions with even shorter shelf lives — marketers need to shift a bigger part of their budgets (if not all) to performance-based models where there is a direct correlation between marketing spend and impact on company results.
With this direct through line and instant impact, marketers will have what they need for better visibility and insights into sales funnels, and to better implement performance marketing models, such as Cost Per Lead (CPL) and Cost Per Action/Acquisition (CPA). Marketers were struggling to successfully execute these strategies pre-COVID, but now have an even more urgent need to do so for long-term sustainability.
To ensure you’re working for the present and the future, here are four ways to take those first steps in achieving positive performance marketing:
1. Define Your CPA to Bring Out the Best
If you’re only just getting started on performance marketing, you should start by articulating what your target CPA is, keeping in mind the specifics around your business and the average lifetime value of your customers. Once you have this clearly defined, you should be able to get started on your performance marketing campaigns. As with all strategies, there are specific things to keep in mind.
- Like every other marketing channel, perfecting your performance marketing is about optimization and getting the details right. Your calls to action, your workflows and internal process to convert customers, and your product all make a world of difference.
- While you pay your marketing partners and publishers, being “performance based” doesn’t mean it isn’t competitive. While you shift more of the media risk to your partners, they’ll be more focusing on maximizing their monetization and earnings per click.
- Performance-based models make fraud all the more important. Your partners are incentivized to increase performance based on your KPIs and the stakes are higher, which means the risk will be as well.
- Technology is crucial. You need good tracking, good reporting, and better visibility.
2. Understand Proven Customer Profiles, Not Just Faceless Leads
This comes with a shift in our mindsets, in making sure our efficiency and understanding of customers are put in focus. Too often, we hear “we need more leads.” Instead, we should be saying “we need more customers.” It’s not a matter of adding more leads to the top of the funnel but adding the right leads.
The right leads represent a customer, your ideal customer. If you can identify who this customer is, you can employ more efficient and productive targeting tactics.
3. Rethink Your Marketing Budget
I can’t begin to tell you how surprised I’ve been to learn how much of a marketing budget is generally put towards performance marketing – when you stack it up to the overall budget, it’s relatively small. While I’m not advocating for all marketing dollars to be spent on performance-based campaigns, it must become a bigger and more structural part of the whole, especially in these times.
The important thing to realize is that this isn’t a one-size-fits-all approach. All strategies are different, but as marketers find themselves focused so much on the bottom-line, they need to allocate more budget to strategies that have a direct impact on results.
4. Embrace Innovation and Double Down on Technology
As marketing teams start to pick up where they left off, there will be a need to solidify your team’s technology output. This means thinking more programmatically when you’re looking into buying groups and finding the right customers. Automation will only increase efficiency across teams and ensure strategies run as they should.
Acceleration on these efforts and ongoing innovation will continue to drive marketers towards new opportunities that focus on sustaining growth. The COVID lockdown created a huge reset for many things in our world. We’ve learned how much faster we can make decisions and how projects can get done. And they’re happening remotely. Moving away from our desks and offices gave us an incredible opportunity to reinvent ourselves and find new approaches.
There are still many unknowns and, depending on your tolerance for risk, it might pay off to crawl before you walk. But it's important to stay agile, be efficient, and think strategically. The bounce-back may take time to achieve, but if you’re following these steps towards performance marketing, the risk will be no match for the reward.
Frans van Hulle co-founded PX, the world’s first transparent customer acquisition platform that provides a single marketplace for companies to acquire customers from hundreds of vetted and sought-after sources. The company provides a mar tech solution for marketers to grow and efficiently scale their customer base, and is active in the Home Services, Financial Services, and Insurance industries.