In this guest post, Salmat’s head of marketing and corporate communications Shane McClelland discusses how your brand can compete when you are the underdog.
Reaching new customers continues to be the biggest challenge facing Australian marketers in 2019, according to figures released in the Salmat Marketing Report this month. Put simply, it comes down to marketing budget. How often are you competing with competitors that are better resourced than you? It often feels like the more money they have, the customers they can reach, more of the time. So for the underdogs, the only way to win (or even compete) is to be smarter and be more targeted. It’s about maximum return, minimal wastage.
To achieve this, we know inherently where we need to start – with the customer. More importantly, understanding their path to purchase and the influential touch points along the way. However, we know this is easier said than done. This is where many marketers struggle.
In fact, when we compare the top six channels that Australian marketers invest in with the channels that consumers use to make purchase decisions, only two of them match – the brand website and TV advertising. This discrepancy is a huge concern given this industry prides itself on reaching the right person, with the right message, at the right time.
So what does the data tell us? How can the underdog become more competitive? Let’s use the simple Stop, Start, Continue method.
Stop over-investing in channels that don’t deliver great returns
Social media is the channel most marketers (54 per cent) are investing in. This is understandable considering how targeted and relatively cost effective it is. However, only one quarter of consumers (25 per cent) use social media to make purchase decisions. In fact, it ranks ninth on the list, with channels like search, letterbox catalogues and online consumer reviews being more influential.
Considering this, marketers should consider shifting some (but not all) of the budget they dedicate to social media to more influential channels to ensure they are getting in front of consumers when they are making purchase decisions. For the underdogs especially, this leaves little going to waste.
Start investing in printed catalogues
The top six channels consumers use to inform their purchase decisions saw an equal split between digital and traditional channels, which demonstrates the need for a balanced marketing strategy. Specifically, printed letterbox catalogues and in-store catalogues both rated highly with consumers, coming in sixth and seventh respectively, out of a list of 24.
However, only 29 per cent of marketers invest in in-store catalogues, and 22 per cent invest in letterbox catalogues. This is surprising, considering letterbox in particular is proven to have more reach and be more cost-effective than any other media in Australia. Statistics show that letterbox reaches 20.1 million consumers, more than free-to-air TV (14 million), newspapers (16.8 million) and commercial radio (18 million). With this reach, readership at 69 per cent, and a unit price of 19 cents, letterbox catalogues deliver the strongest return on marketing investment.
But the humble catalogue isn’t just cost-effective, it actually influences consumer behaviour. Roy Morgan found that catalogues ranked first, second or third as the most useful channel when consumers make a purchase decision across 16 categories. In particular, it came first in grocery, alcoholic beverages, children’s wear, toys, clothing & fashion and cosmetics & toiletries.
Letterbox campaigns can also be highly targeted with the use of online platforms. For example, Swiftplan draws on more than 50 data points, including Census data, household expenditure, and psychographic segmentation to generate highly-targeted audiences for marketers. The tool is intelligent enough to account for factors such as where target consumers live, where they shop, their age, their disposable income, their interests, and more. This allows you to optimise your spend to focus on your most important customers.
Continue investing in your website
Websites are highly influential, with 30 per cent of consumers stating they consult brand websites when making purchase decisions. So investing in your website is important, and marketers understand that, with half (49 per cent) of marketers investing in their website last year. However, there are lots of facets to a website, so it’s important you know what to focus on.
First and foremost, you need to invest in SEO and SEM. Our research shows that search engine results are the number one source of information for consumers when it comes to making purchase decisions, and is now more influential than friends and family.
An important part of SEO is conversion rate optimisation (CRO). CRO is the single most important tactic for maximising the return from your online marketing. Find out exactly why your website is turning visitors away. Identify the barriers causing customers to abandon their shopping cart. Then, implement a conversion optimisation strategy to transform your results.
Other facets of your online experience to focus on should be the last mile, and payment options. When it comes to the last mile, two-thirds (62 per cent) of consumers will always or often search for retailers that offer free delivery, and two in five (41 per cent) will search for free returns. Behind free delivery, the most important thing consumers look for are different payment options such as PayPal and AfterPay (45 per cent).
If you are an underdog brand with less marketing budget than your competitors, this does not instantly relegate you to the back of the pack. It just means you need to rely on your wits rather than your wallet. By sniffing out the right customer insights, you can create a multi-channel marketing strategy that connects to your audience and delivers more bang for buck.