This week’s Points North is from Daniel Clutterbuck, founder of The Webtise Group. He says the world needs accountants – but not that much.
Let me start with an apology to my friend and trusted business advisor Richard Brown (ERC Accountants). He’s helped me immensely with the best financial advice I’ve ever had over the years, so this isn’t a dig at all “numbers people”.
The world needs numbers people just as much as we need good chefs; the issue is more about the lack of entrepreneurial thinking that some numbers folk can percolate. This is squarely aimed at those people who sit in their offices all day creating pseudo futures rather than reading blogs and actually speaking to humans.
It all started in a beer garden
This is how it happened. I was sitting in a rather special beer garden I know when my father-in-law (and unintentional business mentor) said something that sparked more than just this article.
As we sat down and began looking through the food menu, we noticed that what was once a quite a decent food menu had been overly simplified and the prices had increased. He said, “They must have got the accountants in.”
I asked what he meant, to which he explained that when the ‘accountants come in’ the focus often shifts to profits, neglecting what made the business a success in the first place (word of mouth, repeat business, good value, etc).
First click revenue, what to do next?
This conversation was very similar to one I’d been having with the Paid Media Director at Webtise, Ben Wightman. We were talking about attribution and how clients (and agencies!) can take a short-term and sometimes incorrect view on first-click revenues via paid media channels.
I then went to see a prospect who had invited a ‘consultant’ to the meeting. A consultant in an agencies pitch is like having an elephant in the room. Nobody talks about it but you can smell them. You might not like their smell but you have to tolerate it for the sake of business.
This particular consultant said that their client had been spending a fortune on Facebook advertising. Then he added, “it’s really working, but I’m going to cut the spend back to try other channels.”
It turned out that Facebook Ads was the only marketing the brand was doing. So why, why, why would you cut back the budget? I’m sure their spend could be optimised, but you still need to keep the tap running, penny-pincher!
This brand had zero tracking and zero knowledge of analytics, but it was enormously profitable because of its advertising spend. I guarantee that this brand wouldn’t have been this successful if they’d seen the first click revenue from Facebook and had made those decisions based on numbers alone.
Sure, there’s a massive opportunity for optimisation here once pixel tracking is in place, but my point is that Facebook is acting as an introducer for this brand and is growing their brand awareness at the same time. Right at the top of the marketing funnel.
Take this example, what would you do?
You own a brand that sells t-shirts. You want to sell more t-shirts so you get an agency to set up some paid media (PPC, social ads, etc) campaigns for you.
Your AOV is £30 and your margin is 50%. The agency gets involved and starts the campaigns. It could be Facebook, Google, whatever. After one month, Google Analytics is showing that the CPA (cost per acquisition) is £25 in the Adwords/ Facebook channel line but the CPC was really low and in truth, you’re now selling more t-shirts than you ever have and your business is growing.
What would you do? Turn off the campaign and sack your agency?
Over the last eight years, I’ve seen this scenario happen to me and to friends in the industry. On some occasions, I’ve seen future revenues pulled due to first click revenue decisions. But this isn’t what usually happens.
The reality is that people rarely look at ads and then buy from you – not unless it’s an impulse purchase. They need time to learn about you, trust you and see social proof that you’re a real brand.
It’s like saying hello before you buy someone a drink. I’m not going to sleep with you until I’ve seen you a few times, unless of course you’re a superstar. In business terms this would mean you are rare, a one-off opportunity, there’s not a lot of stock left, or you’re a limited edition.
I’m actually married, so the above would never happen, but dating and marketing has so many similarities it’s uncanny.
Multiple devices make tracking hard. It’s getting better, but most SMEs don’t understand their data well enough to take action.
I’m not saying run unprofitable campaigns, I’m saying cover your bases and take a viewpoint that marketing today is more about money in, money out than a single channel operation (I’m sure there’s anomalies).
The trick is to stop thinking solely about single channel profitability and start thinking about how you actually shop as a human. There’s a thing in the advertising industry that’s called brand recall. It’s when you subconsciously see adverts of messages that sink in, but you only realise when you come to make the purchase.
That burger you picked up from McDonalds when you were hung-over, or those over-the-knee boots you didn’t need but still splashed out on (no, I don’t wear them at the weekend). Not all advertising can be directly measured to a specific touchpoint.
Brand awareness actually exists. Whether you’re a brand that nobody knows or a household name, you have to stay in people’s minds. How long have you been seeing Coca Cola adverts for?
So… the next time you’re sitting down with your numbers person, ask yourself this. Do they understand your customers?
If they’re a human and not a robot, you might have a chance.
(*Clutterbuck but it’s not as cool)