How and Why Movers Should Run Marketing Experiments
Consumer marketing is a fickle beast. Almost by definition, it is impossible to know how successful a particular marketing channel is without trying it for yourself. As soon as it is widely known that a marketing channel works, more people start competing for fewer leads there and the channel becomes less effective. The only solution is to always be systematically running marketing experiments.
The first step to running a marketing experiment is to know what your baseline cost per booked move is. If you don’t know this number, you won’t know if your experiments are resulting in higher or lower customer acquisition costs than your current marketing efforts. Use this P4P guide to calculate this number: Mover Metrics: Marketing Cost Per Booked Move.
The next step is to make a list of potential new marketing channels to experiment with. These may include new or growing paid lead sources like MyMovingReviews or HomeAdvisor, established lead sources you haven’t tried in a while like Moving.com or Equate Media, or other performance-based programs like P4P’s Premium Program. Remember that effectiveness of any marketing channel will ebb and flow according to lead supply and demand and consumer preference so it is worth testing each channel at least every couple of years.
Next is to set a budget and time frame. To get a statistically significant data sample, you probably need to spend enough such that you should net a minimum of 3-5 moves from the channel if it works. This means a budget of around $1,500 for experiments, but probably no less than $1000. (If that budget is a stretch, you could start with $500 – $750, but you should probably track how many qualified leads are generated and how many appointments are scheduled and use that to compare to other channels instead of booked moves.) For time frame, running 1 new experiment every month is reasonable, and you probably want to exclude your busiest summer months.
At the end of your experiment, compile all the data including amount spent, leads generated, appointments performed, bookings, and pending. You may need to update this at the end of the month following to see if customers who had not yet made a decision fell one way or the other. If the amount spent per lead, per appointment, and per booking are better than the average over the rest of your channels, this channel should become a part of your regular marketing portfolio now. If it significantly outperforms an existing channel, consider moving budget from a lower-performing channel to this new one. Alternatively, if all channels are profitable in addition to this new one, it is time to increase your marketing budget and grow the business! Remember to always compare channels within the same timeframe, as costs and conversion rates vary seasonally.
Using this methodology, you can regularly be testing new channels and when you hear about something interesting or get a call from a lead salesperson, you can add them to your list and you have a process by which to evaluate and accept or reject new marketing channels.