Applying the 80/20 Principle to Digital Marketing to Drive Sales and Maximize ROI
Small business owners wear many hats including CEO, CFO (chief financial officer), COO (chief operating officer), and CMO (chief marketing officer). With all those responsibilities it is challenging for business owners to determine where to allocate resources for maximum impact and return on investment (ROI). This is particularly true when it comes to marketing and the wide range of strategies, tools and solutions business owners can leverage to drive sales.
This is where the 80/20 principle can help. In business, the premise of the 80/20 principle is that 80% of results come from 20% of efforts. Also called the Pareto Principle, after Italian mathematician and economist Vilfredo Pareto, this formula can help guide business owners in directing their efforts and resources to digital marketing initiatives that have the most impact.
Focusing on five critical areas can help business owners wearing their marketing hat generate the greatest ROI from digital marketing and eliminate the frustration of trying to determine what they really should be doing when it comes to their website, SEO (search engine optimization), CRM (customer relationship management), reputation management and Facebook.
This is less about focusing on quality in terms of the look and feel of the company website and more about function. The quality of web design is important, but what is more important to focus on is ensuring that the company has a quality website as defined by Google. If Google determines that a business has a quality website, the company will show up in the search rankings when consumers are searching for that product or service. When it comes to ensuring websites are “Google optimized,” small business owners should make them:
- Fast loading – How fast website pages load has a direct correlation to bounce rates. Slower loading pages increase bounce rates, which in turn have a negative impact on a company’s search engine rankings.
- Mobile friendly – With the number of smartphone users in the United States estimated to reach 66 million this year, optimizing the company’s website for mobile viewing is no longer a nice-to-have but a must have.
- Up to date – Keeping websites up to date with fresh content and reliable operating and contact information can help upgrade a company in search engine rankings.
Focusing on developing a solid SEO strategy is critical for business owners to drive traffic to their website.
SEO is a powerful tool than can improve a company’s ranking in search results and a must if a business wants to be found online. Consider these facts: Google processed 12.18 billion search queries in July 2020 alone, 93% of online experiences begin with a search engine and 4 in 5 consumers use search engines to find local information.
A Customer Relationship Management (CRM) system is key to helping businesses stay connected to their customers and improving profitability. As a tool that collects a customer’s demographic data, email address, contact information, social media details and more, CRM allows small business owners to use that data to solicit reviews, communicate regularly and run promotions through email and text. Using CRM, business owners can ensure their company stays top-of-mind with existing customers, making it a critical focus area in any digital marketing plan.
Another key focus area for businesses is reputation management. Consumers look to reviews to guide decisions ranging from buying a product, to booking a hotel room to selecting a service provider.
According to BrightLocal, consumers read an average of 10 online reviews before feeling able to trust a local business, the average consumer spends about 13 minutes reading reviews before making a decision and the purchase likelihood for a product with five reviews is 270% greater than a product with 0 reviews.
This data underscores the importance of building a positive online presence by keeping an eye on company ratings on sites such as Google Places, Facebook, Yelp and Trip Advisor. Business owners should aim to have between 5-10 reviews with an average score of 4.5 stars or higher. It is also important to note that in reputation management it is not only critical for a business to have reviews posted, it is just as critical to respond to these reviews.
With over 2.7 billion monthly active users, Facebook pages are important to business success. Business owners should be focusing on maximizing their company’s presence on this platform to engage with target audiences. Companies that are not on Facebook are essentially giving up share of wallet to competitors. A robust Facebook strategy is key to increasing brand awareness, generating inquiries and qualifying leads.
It is also important to note that the 80/20 principle applies to Facebook too. The number one rule in social media marketing is that 80% of a company’s social media posts should be geared toward informing, educating and entertaining the target audience, while only 20% should directly promote a company’s product or services.
Small business owners wear a lot of hats and often have limited time and resources to devote to marketing initiatives. Following the 80/20 rule and focusing on five key areas is a very simple way for small businesses to generate the best results and the greatest return on investment from digital marketing initiatives.