What Is Performance Marketing

Performance Marketing was historically known as Direct Response Marketing. It’s been generally defined by its purpose, which is to elicit an immediate response and measurable results.

Performance Marketing is in sharp contrast to Brand Advertising. The purpose of Brand Advertising is to generate awareness and brand preference. The hope is to drive sales through third-party distribution.

Unfortunately, over the last 100 years the most widely experienced, most widely taught form of marketing is Consumer Brand Advertising. Why? Because the marketing and distribution of consumer goods is a product of the industrial revolution.

What’s The Difference?

Brand Advertising is what we see and hear all around us. It’s on TV, radio, billboards, and in the newspaper, online banner ads and sponsorships. It’s highly visual, fun, costly, discrete, ego-centric, sexy, and has mass market distribution.

Contrast this with Performance Marketing that tends to be much smaller in scale. It’s client centric and all about direct accountability, ongoing processes, databases, research and testing, measurement and statistics. That’s all fun, right? Isn’t it?

What? You Don’t Think Accountability is Fun?

Performance Marketing is an ongoing technical, by-the-number’s process with near immediate performance feedback. It can be scary as hell, because if your campaign does not work, you know it right away. It’s also an ongoing iterative process, rather than the get it perfect, launch it, and hope for the best approach of Brand Marketing. It’s a complete contradiction to the old promotional establishment.

It’s not that Performance Marketing hasn’t been around a long time. Think catalog sales, direct mail letters, fliers, telephone sales, coupon books and such. These pre-internet marketing tactics contributed to Direct Response Marketing being the ugly stepsister to Brand Marketing.

However, if you like analysing data and refining the heck out of things, it can be great fun. I absolutely love it. Especially now that the internet has sped the whole process up from taking months to minutes.

Performance Marketing Is Not A Tactic

Performance Marketing is an approach that can be applied to almost any promotional tactic. All that is required to make something Performance Marketing is a change in expectations. Add an offer, a call to action and a way to measure results and presto, it’s Performance Marketing.

You generally start by selecting a specific niche market. You add an offer and compelling calls to action. You measure response rates and return on investment (ROI) and you’re on your way, doing basic Direct Response / Performance Marketing.

Why Is This Relevant To Small Business Owners?

It’s relevant because you grew up thinking marketing was synonymous with Brand Advertising. This is a problem for many small businesses because they don’t need Brand Advertising. What they need is Direct Response or Performance Marketing.

Their target audience is simply too small for mass marketing. They don’t sell through a distribution channel. They need sales leads and sales more than they need awareness and brand preference. Plus they simply can’t justify the costs involved. Make sense so far?

The Components Of Performance Marketing

Here’s what you need to know to get your head in the game.

The Basics

  1. Start by establishing specific business objectives with performance constraints.
    You need to keep your cost of sale under x dollars to make it cost effective.
  2. Define your niche market.
    One of the primary ways to increase conversion rates is to carefully target an ideal customer via micro-segmentation.
  3. Develop an understanding of your prospect’s needs and purchase rationales.
    Relevance is the name of the game and the more you can anticipate and address the needs of your client, the higher your response and sales conversion rates.
  4. Develop an offer or an offer hierarchy.
    When your goal is to sell, you don’t want to present one option. You want to create a hierarchy of offers from free to paid to ensure you get a return on your marketing investment.
  5. Prepare engaging, compelling, trust and confidence building content.
    Relevance is largely created through copy, photography, videos and infographics. The more you create relevance and trust, the higher your conversion rates.
  6. Develop specific calls to action.
    Calls to action tell prospective clients what they need to do to get what they want. Ideally you build in urgency to help shift people into action now.

More Advanced Elements

  1. Work within a dynamic promotional environment.
    The promotional interface allows you to test different types and versions of your advertisements, to gauge their relative response rates.
    In addition, these environments allow for detailed micro-segmentation of the target audience. Generally, this includes things like geography, gender, age, device, keywords, the time of day, day of the week, and on and on.
  2. Use a testable sales mechanism.
    The sales mechanism is generally a sales landing page or a sales microsite. The ability to run different copy, images, forms and offers allows you to test several scenarios to see what converts best.
  3. Deploy advanced tracking technologies.
    In addition to tracking conversion rates, ideally you want to understand the source of the visitor and their behaviour on the landing page or website. Where did they go, what did they look at, what path did they follow, etc.
  4. Take advantage of programmatic advertising.
    This is where you use algorithms to buy, place and optimize your media inventory.

Hopefully you can see this approach is so much more powerful than running a single advertisement and hoping for the best. The downside is it takes a lot more work to setup and operate Performance Marketing campaigns.

The Impact Of Scale

The beauty of scale in performance marketing is what you can justify. If you have a massive promotional budget you can justify state-of-the-art technology, automated optimization, personalized daily attention and more.

If you’re have a tiny promotional budget, you can’t justify the same rigorous approach. You need to focus on the basics and work incrementally over time. Sometimes you need to wait weeks to accumulate enough data to complete a simple experiment.

What About Start-ups And Small Business Owners?

One of the best things about Performance Marketing is its scalability. It can and does allow solopreneurs and small business owners to participate, where mass media was never a viable option. The most effective places to start will vary by industry, however, the top channels for most small businesses are Google, Facebook, Bing and sometimes Instagram.

The Big Divides

In our experience, there are many different arenas in Performance Marketing and they all have their idiosyncrasies, different technologies and expectations. There really is no one-size-fits-all. These arenas include:

Classic Direct Marketers

This is the use of so-called old school techniques like direct mail, telemarketing, tradeshows and even niche advertising. Yes, all of these tactics are still relevant.

Content Promoters

These marketers use Performance Marketing to promote their digital content and to generate email signups and social follows. Their goal is to build a list or cultivate a following to drive sales via email marketing and social promotions.

Performance Advertisers

These are the new crop of high-performance brand advertisers. The focus is still awareness and brand preference, just in a more efficient and cost-effective medium. They tend to focus on reach and frequency and the unit cost for response rates, online engagement and downloads. They generally employ email and social marketing as part of their follow-up mix.

Simple e-Commerce Sales

These marketers generally have one or a small number of products. The intension is to drive trials, email signups and sales as cost-effectively as possible.

Complex eCommerce Sales

These marketers tend to have e-commerce stores with many products. The goal is generally split into 1) the acquisition of new clients or first sales and 2) email marketing to generate sales from existing clients.

Simple Sales Lead Generation

Sales lead generation sites are for businesses where the final sale needs to happen in-person. The goal is to generate qualified sales leads from advertising for a sales representative to follow-up with. A simple sale is generally low-cost or a commoditized service that clients already understand. Clients know what they want, they just need to find a vendor. Tracking the cost per lead and sale are the key performance measures.

Complex Sales Lead Generation

Complex sales lead generation is similar, but the offering is generally much higher-cost or intangible. The prospective clients often have a loose grasp of their needs. Frequently there is a complex multi-stakeholder decision process. The main goal is to minimize the unit cost per qualified lead while maximizing ROI.

Where do you fit into the mix? Did you recognize yourself among these options?

Where Do You Start?

Start with the basics. Performance Marketing is not a project, it is a continuous improvement process. You live it and breath it. It is fluid and dynamic with daily practices. Why? Because it never ends. There is always something else to test and improve. Sure, there are diminishing returns, so you need to keep things in perspective.

If you want to get started in Performance Marketing, start small. Get one complete campaign up and running, with tracking in place. Use it to learn the ropes. Refine that little campaign until the cows come home so you learn the process and develop your skills.

Once you’ve gained some mastery over the craft, you can take on more advanced tactics and scale up your budget.

Is Performance Marketing For You?

You may find you really love the logic, data and immediate feedback or you may find you absolutely hate it. It is not a process for everyone. An obsessive personality disorder is not a liability in this line of work.

You also need to be versatile with a mix of skills. You need to be somewhat technical, creative, and like to dig into details while having empathy for client needs. It helps to grasp systems thinking and be comfortable thinking laterally, all at the same time. If that sounds fun, maybe you too can be a performance marketer. If not, at least you understand it a little better, so you can hire someone who loves Performance Marketing.

To learn more, we offer several Free Marketing eBooks to help small business owners drive sales with Performance Marketing. More specifically consider reading Investing In Advertising as a next step.

To BNI Or Not To BNI

You might be wondering, what the heck is BNI? BNI stands for Business Networking International. It is the world’s leading business referral organization with over 264,000 members in 9,288 chapters worldwide. BNI operates a network of franchises in different territories. Here’s a link to the BNI franchise site. The 12 Calgary chapters are part of the BNI Alberta South organization. If you live in Southern Alberta there are 4 chapters in Lethbridge and 2 in Red Deer. If you live outside of Calgary and Southern Alberta, there are local chapters in many cities and towns worldwide. Visit the Canadian site or the global website for chapter locations and meeting times in your area.

BNI is the brainchild of Dr. Ivan Misner, who started the organization over 30 years ago. The idea is simple enough; you meet each week with your chapter members, and any interested visitors, to learn about each other and your respective businesses. The premise is, once you get to know, like and trust the other business owners, the more likely you’ll refer business to each other.

The Review Back Story

I’ve known about BNI for years, but I joined a chapter about 2 years ago after repeated recommendations from a friend. I’ve spent the last two years meeting 45-50 business owners for breakfast every Thursday morning. I’ve gotten to know people better between meetings and, when available I’ve attended periodic social and educational functions as well. I have never networked so much in my life, and I could have networked far more if I had the time.

As an introvert, I’ve always avoided regular networking; preferring internet marketing for online sales lead generation. Internet marketing is so time and cost-efficient, I could never get my head around committing to regular in-person networking meetings. Plus, it was a great excuse to reinforce my introverted tendencies.

After my two years in a BNI chapter, I’ve become clear what I like and dislike about it. Hopefully, I can help you decide if BNI is a fit for you.

Who’s In The Room?

The members tend to be small business owners, independent contractors or sales representatives.

The chapters are all different but they tend to be organized into 4 groups called power teams. There is the Business Services Team who all focus on B2B clients. The Health Services Team is focused on different aspects of health care. The Home Services Team are all focused on some aspect of real estate or home ownership. The Personal Services Team all focus on B2C offerings such as a florist, personal financial services, photography or an automotive shop. The teams work together to develop mutually beneficial relationships to take advantage of natural synergies within different buyer journeys.

Is BNI Worth It?

Like anything, you get out of it what you put into it, and some people and businesses are better suited for BNI than others. The more accessible and simple your business is, the more likely you are to do well with BNI. Speciality companies may need to work harder to connect to niche networks through BNI, but it is possible to make it work.

The more friendly, and outgoing you are the faster people will get to know, like and trust you. But it is not a personality contest, even introverts can do well in BNI. In fact, introverts tend to do well with the one on one meetings that are central to the BNI model.

The biggest benefit I’ve received through my participation is learning how difficult I was to refer. I didn’t realise how different my systematic approach to marketing was from what people expected. The weekly meetings were an important catalyst for solving that problem. It was BNI that inspired me to create my Free Marketing eBook Series to make Accrue easier to understand and refer to others.

One way to think about your BNI group is as your sales team. You’re all there for the same reason, to get more referrals and to grow your business. For the team to work, everyone needs to contribute. To make it work, you need to realize what you’re getting into and show-up as part of the team. I know it took me a while to figure that out and to a set up a system to help me do that efficiently.

The other benefit of BNI are the friends you make. I’ve met some wonderful people through the experience and I know friendships are a big part of the value I’ve received.

A Key Benefit of BNI is Personal Growth

Having to stand up and introduce myself each week in 35 seconds has encouraged me to refine my introduction over and over and over again. I would have never put that time in, if not for the weekly need to do so. There is nothing like the “deer in the headlight stare”, to get you to rework your introduction.

About twice per year you deliver a presentation to the group and visitors. You have six minutes to make an impression and help train your group how to recognise an opportunity and how to refer you. It’s quite a challenge to say something meaningful and engaging in six minutes. But it is a great opportunity to refine your message. I’ve completed four presentations and I can tell you my fourth was better and more effective than the first few I did.

What’s important is the consistent practice. It’s like learning a sport or playing an instrument. When you’re practising all the time and getting audience feedback, you work hard to get better. Apart from the referrals, I think this constant practice is the most important benefit of BNI. I’ve seen huge gains, simply by practising all the time.

If you’re going to take BNI on, there is a requirement that you become an effective networker. There is no coasting and it has challenged me to approach networking much more rigorously and systematically, which has been a good pattern for me to adopt.

Common Misconceptions About BNI

You don’t join BNI to sell to the other group members. Although once you get to know, like and trust the other people, you do tend to buy from each other. But that is not the point of the group. The point is to tap into each other’s personal and professional networks.

BNI is not just another unstructured networking meeting. The meetings follow a structured agenda and the goal is to generate referrals by following the BNI model.

Key Questions To Ask Your Host

Ask your host to explain how the seat structure works. The promise is that there is only one person per profession. However, the professions are subdivided up so tightly it can be a meaningless distinction. It’s not the same for every seat either. In some cases, the professions are very distinct, whereas in others they are divided up in highly impractical ways. This is my main criticism of BNI. In my opinion, the seat structure is in desperate need of an update. It is not unworkable, just something to be clear on before you join.

Another thing you need to understand are the expectations. I know I did not understand the traffic light system, until after I joined. Make sure you are clear how it works so you know if you can commit.

The traffic light system is a scoring tool for individual members and the chapter as a whole. You and the chapter are scored on a 100 point system that rolls up into a Red, Yellow and Green rating. Everyone starts in the red and your score improves relative to your performance. Getting out of the red is easy if you try, but getting into the Green requires some effort. Ask your host about their chapter’s score, it will tell you how well the group is performing as a whole.

The fourth question I would get clarity on, is what does it take to succeed in your chapter? How much referral business are you expected to bring in each year? Given the other people in the room and the structure of your network, can you generate regular referrals for the other members?  Reciprocity is important and you need to be able to give, as much as you get.

Who Should Not Join BNI?

  • If you’re unable to commit to 6-8 hours per week of networking related activities, don’t join.
  • If you’re looking to show up and not put any real effort into becoming an effective networker, BNI is not going to work for you.
  • If you have a tiny network or serve a small customer base, it might be challenging to offer reciprocal referrals to the group.
  • If you’re not serious about generating work from networking don’t bother. It takes a lot of effort to justify your investment in networking.
  • If you don’t want to build business relationships and be a team player, don’t join.
  • If you have a very specific or elite market niche, it might be challenging to justify your time.

Would I Recommend Attending A Meeting? Yes!

I have found the BNI culture to be very positive and welcoming. The food at our venue is great, the jokes have been plentiful and there is no pressure for visitors to join. It’s just a nice morning out with some great business people from a wide range of industries. There’s a very good chance you’ll meet someone you would like to do business with.

Use the opportunity to experience the process and ask questions, like the ones I’ve suggested. If you like what you see and you feel like you can commit, great. Give it a go for a year. If not, that’s okay too.

What To Expect

The small business owners in the room are high-quality, high-integrity people worth knowing and adding to your list of suppliers. You might make a valuable connection in the process and, if you are like me, it’ll get you out of your comfort zone on a weekly basis. You’ll introduce yourself and your business to a group of business owners each week, which is great practice in-any-case.

If you’re interested and want to learn more about BNI please contact me.  I’m happy to share my experience with you, with no sales pitch as I have no affiliation with BNI.

Calgary BNI Groups

If you’re looking for a chapter to join, you can access a list of Calgary BNI Chapters here. The BNI chapters are not all the same size. Some are brand new and some are over 20 years old. All the chapters are different and have a different feel to them. You’ll want to visit 2-3 different chapters to decide which one is the best fit for you. Don’t forget to ask them about their traffic light score.

Pay attention to the people, the venue and the meeting time. You’ll spend a lot of time with these people and at the event location. If you don’t enjoy both, go check out another chapter. If the timing does not work, find a chapter that meets at a more workable time. Despite the structured format, all the groups are different and you’ll want to find one that fits for you.

I hope this article helps you decide to BNI or Not to BNI for the networking aspect of your marketing system.

If you’reinterested in learning more about networking I’ve prepared a free eBook called Get More Referrals. It was originally prepared for a presentation I gave to my BNI group. I hope you find it useful.

Considering A New Website?

If you’re considering a new website, chances are you need to slow down and get ready first. Why?

Because you probably have work to do before you’re ready to get value from your investment.

Let’s Test This Assumption

See if you can answer these basic marketing questions with simple one-line answers.

Ask yourself why am I building this site?

  • What are my success criteria?
  • What conversion rates are necessary to reach my financial goals?
  • Who are my ideal clients?
  • What core problem do I solve for ideal clients?
  • What does my client’s purchase process look like?
  • How do my clients seek help on Google and Bing?
  • Who are my primary competitors?
  • What is my primary competitive advantage?
  • What is my lead offer to first-time clients?
  • Do I have a brand identity kit developed?
  • How do I intend to generate traffic to my website?
  • What is my maximum cost to acquire a new client?
  • How will I respond, track and follow-up on sales inquiries?
  • How do I measure marketing investments?

If you answered each question clearly and confidently, good job; you’re further along than most.

However, if you found it difficult to answer these questions, park your website project until you’re clear and confident in your answers.

We’re prepared a series of Free Marketing eBooks for business owners, meant to help you prepare. We invite you to download and read a few to help you prepare. By getting ready first, you’ll save a bundle on your website project, and more importantly, you’ll end up with a website designed to support your client’s needs and your business’s needs, instead of building a useless brochure website.

We also offer a Free Marketing Coaching Session, if you’d like to speak with an advisor before you jump into action.

Spin Selling: A Sales Classic

I first read Spin Selling by Neil Rackham in 1999. Why blog about it now? Because SPIN Selling continues to be the book I recommend most often for professionals looking to increase their sales effectiveness.

Although this book may not be the newest book on sales (it was first published in 1988), it continues to be the most relevant. I find it the most relevant because it addresses the most common sales problem. The problem I am referring to is our collective tendency to pitch what we do to clients, rather than helping to facilitate solutions. This latter approach is also known as consultative selling.

In my experience there are not many people who like being pitched to, but most people appreciate when you are legitimately trying to help them solve real problems. When you become skilled at leading people through a discovery process that encourages them to take on tough core problems, it can result in a steady stream of new business. It’s all about fostering win/win scenarios, and SPIN offers a very simple and effective framework for consistently doing this.

What Is Spin Selling?

Spin Selling is the outcome of Neil and his team going out on roughly 35,000 sales calls over a 12 year period. His team documented the sales processes which followed, and distilled what worked into the SPIN approach. The types of sales they followed were medium and large corporate clients with complex, multi-stakeholder, and high value solutions. They found that success boiled down to a four step discovery process abbreviated into SPIN (situation, problem, implications, needs / pay off.)

How Does Spin Selling Work?

The beauty of the SPIN framework is in breaking down a complicated consultative sales process into four simple, logical, and repeatable steps. The goal of this process is to uncover the fundamental limiting issues beneath a client’s current situation. The SPIN process helps to systematically lead a client from;

  • seeing where they are now, to
  • understanding what problems are holding them back, to
  • appreciating what these issues are costing them, to
  • knowing what benefits will accrue if they invest in a solution.

I have personally followed the SPIN method since 1999, and I believe in it wholeheartedly. I find that this method is a highly effective way to structure consultative conversations and I follow the approach consistently. I also find that the SPIN model translates well into campaign landing pages used in on-line sales lead generation programs.

The main limitation of the SPIN approach is that it is not a complete system for selling. It only addresses one vital portion of the sales process. It does not address sales planning, prospecting or the post meeting process for converting a successful conversation into a closed sale. For insights into these areas you need to supplement SPIN with other materials.

Further Recommendations

For a complete and integrated sales process that aligns well with SPIN, I recommend the Sandler Sales Institute Sandler International, who offer an excellent over all process to follow. I must have listened to their CDs a dozen times when I was first starting out.

I also recommend the 10 Steps to Sales Success by Tim Breithaupt of Spectrain from Calgary, Alberta. Tim’s book is excellent, offering a simple and easy overall process to follow. It aligns very nicely with both SPIN and the Sandler models.

As your ultimate success in sales comes down to your ability to engage your clients in meaningful conversations; I always go back to SPIN Selling as my number one recommendation.