Digital Marketing for Winning New Customers

Winning new customers is essential to growing a business continuously.
At many companies new business development is not strategic: new customers come from referrals by existing customers, or from enquiries that arrive at random.

On that basis, management cannot expect growth to be planned.

This article focuses on three things.
①How to combine your existing new business development with digital marketing
②How to think about the marketing budget
③The best order in which to invest in digital marketing activity

1. “Awareness” and “consideration” in marketing

We have drawn out the current methods of winning new customers and what follows them.

Dinners between executives, card-exchange events for salespeople, introductions from acquaintances, and so on:
cases where contact is made in person.
Cases where you buy a list of prospects and approach them by telephone.
Cases where you use direct mail or flyers.

From those channels a document request actually comes in, then a meeting, then an order.

In marketing terms this flow is classified as “awareness” and “consideration”.
Providing the chance for a customer to learn about a product is called “awareness”; providing the chance for them to weigh up whether they need it and compare it with competing services is called “consideration”.

Add digital marketing in at the points where it plays the same roles and you get the following.

Twitter and YouTube mainly play the “awareness” role.
Google Ads mainly plays the “consideration” role.

That is the shape of it. Digital marketing sounds complicated, but in practice it is simply
an alternative to cold calling and direct mail.

Think in terms of roles like this and digital marketing methods are easy to plot. Below we have classified the methods you hear about most often in digital marketing.

Beyond Twitter under social, there is PR TIMES, well known as a public relations channel.
And GeAIne (pronounced “jean”), a form marketing tool that drops messages into prospects’ enquiry forms, is another channel that counts as “awareness”.

Beyond Twitter under social, there is PR TIMES, well known as a public relations channel.
And GeAIne (pronounced “jean”), a form marketing tool that drops messages into prospects’ enquiry forms, is another channel that counts as “awareness”.

2. Offline marketing compared with digital marketing

In other words, what offline marketing and digital marketing have in common is this:

[Every channel plays either an “awareness” or a “consideration” role]
[There is a meeting immediately before the contract]

.
The differences are as follows.

On close rate, offline tends to come out ahead, with referrals from existing customers and the like.
And when you lose a deal, you have heard it face to face, so feedback is easier to come by.

Digital marketing, on the other hand,
can approach target groups broadly across the whole of Japan, and lets you measure things like time spent reading, the age and gender of readers and which pages draw interest for each move you make.

3. An example of new business development using digital marketing

Here is one example of developing customers efficiently.
Say you are a manufacturer dealing in packaging materials. You want to develop restaurants and retail companies that will buy them.

Below are terms related to packaging materials and the number of searches they get in a month.
Read the keywords from the top and you can work out what intent lies behind each search.

For example:

“packaging materials” alone is too broad for the intent to be clear.
“packaging materials industry” is being searched by people job-hunting.
“packaging materials cheap” is being searched by prospects, that is, trade buyers.
“packaging materials commercial use” likewise is being searched by prospects, that is, trade buyers.

That much you can tell. Google Ads works by bidding on the terms searchers are looking up, and rather than bidding on every instance of “packaging materials”, bidding only on compound terms such as “packaging materials cheap” and “packaging materials commercial use” can bring your cost per enquiry down.

Looking at the search keywords, many people also search packaging materials together with an area name (Okinawa, Okayama, Saitama). You could hypothesise that there is a strong culture of favouring suppliers rooted in the area, and work claims such as [flat delivery charge nationwide] or [stock checked within one business day] into the case you make, so that people are reassured even though you cover the whole country.

4. Working back from revenue to the marketing budget

Now let us explain how much marketing spend you can actually commit.
As a rough market norm, advertising spend is said to top out at 15%.

Working on that 15%, put current annual revenue and advertising spend on the left.
On the right, put the target annual revenue and the maximum advertising spend you are prepared to commit.

In the figure below, current annual revenue is ¥100 million with ¥10 million of advertising spend (a 10% ratio), and if next year’s target is ¥200 million, then 15%, that is ¥30 million, is the most you can spend on advertising.

When you put weight behind marketing it is done with one of two intentions, [increase revenue] or [cut cost], and in my experience it is usually [increase revenue].
In other words:

“At this rate we will miss the target, so let us go for the revenue even if the advertising ratio rises a little. The gross margin rate may fall, but the gross profit goes up.”

That is the thinking.

Once the total budget available is settled, work out the cost per enquiry you need from the average revenue per order (sometimes called LTV) and the close rate from enquiry.
In the example below, an order brings in ¥2 million and the close rate from enquiry is 25%, so
you need 200 enquiries at ¥75,000 each.
Of those 200, aim to sign 50.

That is the conclusion you reach.
This measure, “200 at ¥75,000”, is the one the marketing team tracks day to day.

5. The best order in which to invest in digital marketing activity

With the budget settled, we explain the order in which to invest in marketing.
Marketing has what is called the catcher, the last gatekeeper after someone visits the site and the equivalent of the salesperson in sales terms, and what is called the path, the role of the caller who hands people over to the salesperson.

Start by building the service page that acts as the catcher.

There are three main points in producing a service page.
・Thorough SEO
・A structure that is easy to read and easy to understand
・Your strengths are clear

Write it so that it is obvious who the service is for and what it does, as below. Clarity matters more than looking slick.

Next, build the path. Start with the ones whose return is easy to see.
Google Ads, Facebook ads and form marketing are the ones that fit.
You get data on how many people viewed, clicked and applied for a given amount of money, which makes improvement straightforward.
The ones that are harder to read are the YouTube ads and Twitter ads mentioned earlier in this article.

For more on how to design digital marketing in detail, see the article below.

The classic approach to designing digital marketing

6. In closing

We hope that was useful. To recap:

• All marketing activity is classified by the roles of “awareness” and “consideration”
• Digital marketing is classified in the same way
• Digital marketing is characterised by the breadth of its reach and the accuracy of its measurement
• Set the budget from advertising spend as a percentage of the revenue target
• Derive the number of enquiries and the cost per enquiry from the advertising spend, and make those your marketing targets
• When you put it in place, build the service page that catches the demand and run the ads that lead people to it

It looks complicated, but what you are really doing is just a flyer you can measure.
Do use this as you build a growth strategy that starts from marketing.