Mary, Mary, quite contrary
How does your business grow?
With Facebook posts and white papers
And articles all in a row.
No one really thinks that publishing content grows a business, do they? Perhaps I shouldn’t be asking that in our line of work. Maybe I ought to nod and smile and dutifully help clients offer their tributes of content to the Internet Gods, as if the simple act of publishing articles accomplishes something important. Or instead, maybe I should help marketers move past the early fascination that also plagued social media marketing a few years ago. And remember several years before that, when just having a website meant imminent success? Yeah.
If you have a hand in developing the growth strategy of your business, or you help your clients with theirs, you must first determine if and how content marketing tactics (especially distributed content like guest posts, sponsored posts, paid reviews and press releases) can help achieve your business goals. It’s true that content is very useful in public relations and reputation management, which may not affect revenue growth in a direct way, but most businesses don’t need reputation management. They don’t need “branding.” They need sustained revenue growth.
Can content marketing help you grow revenue? That depends. What’s your engine of growth? Does content help fuel your engine and your sales funnel? And are there other tactics that would return more benefit for the same cost?
The Three Engines of Growth
How a business creates sustained growth depends on the nature of it’s products, it’s business model, and the niche it serves. In The Lean Startup, Eric Ries describes what he calls three different “engines of growth” which are all built around one thing: how past customers fuel your acquisition of new customers.
This is not just a startup concept. Every single business that runs on the revenue it’s customers bring in can only continue operating if it’s engine doesn’t run out of fuel.
- The Sticky Engine of Growth
Products rely on high customer retention in order to grow. Think of contractual services that aren’t convenient to get in or out of, like cable and internet providers, or subscriptions that hang around like gym memberships or insurance policies. These products succeed by keeping customers happy for a long time.
- The Viral Engine of Growth
When user adoption grows as a natural consequence of being used, that’s viral. Social media, for example, doesn’t just fuel viral content, it’s built on a viral engine. Keeping customers engaged for the long term isn’t as important as creating a vast user base, which is why many products like Facebook and Twitter are free to end users.
- The Paid Engine of Growth
Expansion is determined by the difference between customer acquisition costs and revenue per customer. To grow faster, the company must reinvest net revenue in gaining new customers, or find another revenue source. The more it has to invest, the faster it can grow. Franchises fit this model well, sourcing growth funds from new franchisees, but those new investments must yield profitable new locations for the company to last. Any company that creates sustainable growth through monetary investments (advertising or otherwise) is running on a paid engine of growth.
None of these engines are mutually exclusive– your product might depend on more than one. However, there is typically a dominant engine of growth that suits your product best. Your task is to know which one that is. Most companies depend on a paid engine, augmented by the others.
Often, marketers confuse their preferred (or new and exciting) marketing tactics with what their products actually need to gain new customers. For example, while a rising pay-per-click cost might be straining your budget, that doesn’t mean your product is suited for “going viral.” A truly viral market strategy requires a viral product, not just a piece of content that lots of people share. In other words, you can’t decide to change your engine of growth– the nature of your product determines it.
If you have a tween at home, you’ve heard of Rainbow Loom. It’s everywhere, including Jimmy Kimmel Live, and safe to say it’s gone viral, although as a toy, it depends on a paid engine of growth for sustained revenue.
Can Content Fuel Your Engine and Improve Your Sales Funnel?
Content can be powerful, but it can also be a big waste of time. Whether it’s a good idea for you to focus on creating and distributing content is largely determined by what fuels your engine of growth and how your sales funnel works. I don’t want to add a wrinkle here, but they aren’t the same thing.
A small sandwich shop that depends on foot traffic and promotion (paid engine), has a very short sales funnel. Most customers walk in and try it, some may ask a friend if it’s any good, some will read online reviews. The owners would accomplish little by blogging about it– the sales funnel is as short as it gets.
Now, imagine a very large industrial parts supplier who’s products are integrated into a wide array of manufacturing processes (sticky engine). This type of sales funnel is very long and involved, driven partly by data-rich documentation as well as long term relationships that develop in the process of discovering how specific parts could be purpose-built for a manufacturing application. However, like the sandwich shop, the top of the funnel is very narrow– only certain types of prospects would make good customers. So, attempting to build a large online footprint isn’t likely to improve business results for this company, either. If the industrial supplier does create content, it ought to focus on white papers, articles in trade publications and trade show events that usher new prospects through a funnel that could take months or years of active engagement to complete.
On the other hand, think about do-it-yourselfers, consumers learning about a new kind of product for the first time, individuals trying to figure out how to engage the right service company, a small business owner trouble-shooting her computer problems, or people researching travel destinations… these are all examples in which the prospect learns something useful that could lead to a sale.
The general rule of thumb: If your business depends on a wide funnel (many potential customers) and if helping prospects conduct independent research aids in the decision process, attracting new customers through content can help.
At the top of the funnel, content can
- Get you found in search
- Provide content discovery opportunities
- Get you in front of niche audiences by publishing on related blog sites
- Give consumers self-directed learning resources
Further down the funnel, content can provide decision-making support, especially in regards to products with technical details or many details that are unfamiliar to the prospect.
Are There Better Ways to Grow Your Business?
This is not an all-or-nothing answer, like the industrial supplier above. Effective growth strategies are built upon a number of tactics used in concert; those tactics may not include content as a top priority. Let’s take a look at a handful of cases to see how content may not fit into the plan.
Facebook never needed content to grow because it’s a purely viral strategy: more users beget more users. Their marketing is baked into the product. Content can’t help like better features can. That isn’t to say content doesn’t help– much has been written about Facebook, which certainly aided it’s growth, but Facebook’s marketing job was never to write about itself, or about social media in general, for that matter.
Speaking of “baked in,” a local bakery here in my Denver neighborhood also bakes incredible products, which quite literally sell themselves. Most of their product goes to local restaurants, but it’s so good, customers demanded a store front with more hours and greater variety of products. So investing in content is not as worthwhile for them as investing in the best ingredients and skilled personnel. Unlike Facebook’s viral engine, the bakery runs a paid engine, though both grow most efficiently by delivering high quality products.
A local quick service oil change company might benefit most from top of mind strategies like a great location, coupons and regular customer reminders. Assuming they get a citation in Google and earn praise through sites like Yelp, they’ll be listed in local search early and often, so that’s not an issue. Some customers might be more likely to find them online if they publish more content, but any difference there would pale in comparison the company’s offline tactics. Of course, if that service company is a franchise, the franchisor may attract new franchisees with deep content resources around running a retail auto care business.
I once partnered with a marketing consultant who specialized in postcard mailers. Few of his new customers ever went looking for postcard solutions. Instead, he contacted and networked heavily with every local service business he could find and converted a reliable percentage of them, many for on-going seasonal promotions. His paid engine of growth was finely tuned. I remember him stating with great pride that every call he made earned him about $47 in revenue, since he’d close about 10% of them for more than $470 per average sale. He could very well have marketed in more robust ways using content, but his returns likely would not have matched his own postcard-plus-phone-call strategy.
Recently, a local commercial HVAC company had to lay off employees due to decreased revenue. When they brought in help to determine how to ramp up their sales again, it was discovered that they had no follow up processes in place to contact customers after the initial installation project. No follow up process to proactively reach out to thousands of commercial clients who could use regular maintenance once or twice a year?! They don’t need to write articles about heating and cooling. They need a CRM and to rehire their staff to begin calling, emailing (and sending postcards) to every past customer on a regular schedule. Their estimated potential revenue based on those efforts alone: approximately $1 million per year. Only after they get their basic growth engine tuned up should they even think about casting a wider net with content.
The greatest risk in jumping on the content marketing bandwagon is ignoring another, more profitable marketing tactic that directly supports your business growth strategy with the resources you have. If you understand your engine of growth, and you know how your ideal sales funnel works, great content can help it work better.
Now that you’ve qualified whether your business is a content marketing candidate, stay tuned for Part 2, where we’ll discuss successful content strategies and how they work. Click on the right to follow our blog so you don’t miss it!