More Clients TV
Short Term vs Long Term Marketing: Where Should You Focus?
Should you be focused on short-term “sales activation” marketing to get more leads and sales from people already looking to buy?
Or should you focus on building your reputation, authority and brand?
In this episode of More Clients TV we look at what the research says, what the best ratio is, and how to vary it based on your situation.
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Short Term vs Long Term Marketing: Where Should You Focus?
Should you focus your marketing on getting immediate sales or on building your reputation, your authority and your brand?
You'll often here the simplistic answer that you should always focus on the long term. But in the real world, unless you bring in enough sales to pay the bills in the short term, there is no long term.
So in practice, there's always a balance between focusing on getting more sales now and investing in the future.
When it comes to professional service businesses, focusing on short-term sales means doing things like networking or tapping in to your existing contacts and having conversations with potential clients who are in the market right now for services like yours. It could also mean using advertising that's focused on getting an immediate lead and converting that lead into a sale quickly.
You're focusing your efforts on people who are ready or close to being ready to buy right now and your goal is to get that sale.
Now the advantage of that type of “sales activation marketing” is that you get an immediate sale. It brings in revenue which you can use to pay the bills, immediately reinvest in the business or take as profits.
The problem is that it's a bit of a treadmill.
Typically once you've been been to that networking event or reconnected with an old contact or run a Facebook Ad and got a lead that's turned into a paying client, you have to do the same again if you want another client.
You've got an immediate influx of revenue, but you're still stuck on the treadmill and need to keep repeating for the next client and the next and the next.
On the other hand, “brand building marketing” that focuses on building your reputation and authority has a much longer investment curve with a much lower chance of immediate sales.
In professional services, what you're doing here is writing articles, making videos, appearing as a guest on podcasts or summits, perhaps even writing a book.
Your focus is on people who could be clients in the future, but aren't ready to buy right now. And, of course, there are many more of them than there are people ready to buy. In some cases it might be 80:20. In others 95:5. But there are always far more people who could be clients in the future if you do the right things than there are people ready to buy right now.
Your goal with brand building marketing isn't to get an immediate sale, it's to change their perception so that they're more likely to buy from you in future.
This could be making them more aware of a problem they have and its urgency. Or it could be raising your credibility and status as an expert and building trust. Usually it's a combination of all these things.
The goal is partly to accelerate their journey to being ready to buy. But primarily to ensure that when they are, you're top of mind and seen as their preferred choice.
Brand building marketing has a huge return on investment when it works because when you build a reputation and authority it doesn't decay quickly.
Your reputation persists. The books you write stick around. The videos you make and the articles you write stick around and continue to work for you in future.
Of course, you keep building your brand over time. But you're not starting from ground zero every time like you are with sales activation. Your impact builds like compound interest.
So if you had all the time and all the money in the world, your highest return on investment would be to focus on brand building.
And you'll know yourself that when you've already built a reputation and someone sees you as the best expert in the field, selling is really simple. They come to you already wanting to buy from you.
But takes a while for your brand building activities to get you to that situation, and during that time you're investing without seeing many immediate sales in return.
So in the real world, most of us will need to balance sales activation for short term impact with longer term brand building.
What's the right mix for sales activation versus brand building?
The researchers Les Binet and Peter Field have done extensive analysis over a number of years into marketing effectiveness across multiple industries and very long time spans. And they've particularly looked at this balance between long term and short term investment.
Their research has identified that a ratio of about 40 percent sales activation to 60 percent brand building brings the best overall returns. Of course it varies by industry and by situation, but overall that figure rings true for me too.
The brand building you do gets more and more people seeing you as an expert who they'd want to work with. And in the short term you're getting little spikes to boost your sales from your sales activation marketing
In practice, a 60:40 ratio means that if you spend one day a week on marketing then you should be spending a couple of hours out of that day on conversations with potential clients or reaching out to people who you think are nearly ready to buy and talking to them about that next step of beginning to start to work with you.
The rest of your marketing time should be spent creating long-term reputation building assets like writing an article, appearing on a summit or a podcast, crating videos for your YouTube Channel. Assets that will create a perception of you as an expert and “stick around”.
Now while that 60:40 ratio may work best generally, in practice, everyone is in a different situation.
If you're a startup or you don't have a lot of sales currently and you don't have a lot of cash stockpiled in your business then you're in a very different situation to a business that's got plenty of cash and is just going through a temporary slump, or an individual with plenty of savings they've earmarked to fund the business for a while.
The key metric to look at is the length of your “runway”. In other words the amount of time before the cash in your business runs out.
Cash here could be your initial funding or savings, previous revenues still in the bank, or “guaranteed” sales already in the bag from clients. Basically your runway is the length of time you can survive before you need another cash influx.
The length of that runway determines how much you need to adjust the 60:40 ratio.
If your runway is less than 6 months then essentially you're beginning to look down the barrel of a gun client and cash-wise. And you need to put more time and effort into sales activation.
Do more of the immediate networking and calling your old contacts that's going to lead to sales. If you run online ads, ramp up those that are going to generate immediate leads for immediate sales, or use retargeting to turn leads into buyers.
On the other hand if you've got a fully booked business with a runway of a 18 months or more you can afford to step back from sales activation and invest more in your brand building to really push up your impact long term..
Focus on building authority and building your reputation by writing articles, creating videos, appearing on podcasts, appearing on other people's YouTube channels, appearing on summits. Maybe even start work on that book you've been meaning to writer forever.
You'll still do some sales activation of course. But you can ramp the amount down and ramp up the brand building for higher future return on investment.
And in the middle, the 60:40 Binet and Field recommend or thereabouts will work perfectly.
But above everything else, use your intelligence. Make sure you're always doing some sales activation and some brand building rather than thinking it's just one or the other. And adjust them based on your needs and what seems to work for you.
Ian Brodie teaches consultants, coaches and other professionals to attract and win the clients they need using Value-Based Marketing - an approach to marketing based around delivering value, demonstrating your capabilities and earning trust through your marketing.