Q4 is your time to shine, marketers! It’s peak season for every retailer and honestly just about every brand. This year, instead of throwing your marketing dollars at the wall to see what sticks, we have a few tips for spending your dollar and getting the best possible return you can. Get ready for a step-by-step approach to maximizing your marketing ROI and driving sales growth, even with a tighter budget.
1. Conduct a Performance Audit: Compare Marketing vs. Business Results
Utilize Business Data: Tap into sales & customer data to understand the path to purchase and marketing’s impact on the business. Capture critical insights such as:
- How many orders do you have?
- What are your biggest days, weeks, and times?
- How many customers & cohorts? Which stores are best vs. worst? Where are the most successful stores located?
- What products have the best results, and which have the worst?
Compare Marketing vs. Business Results: Analyze the performance of your current campaigns through the lens of your business results. For example:
- Are marketing campaigns investing in your best customers, stores, cohorts, and products?
- If your top-line numbers are below expectations, are you marketing to new users & audiences?
- If your customer LTV numbers are below expectations, are you engaging with your existing customers?
- Are campaigns and channel investments aligned to their core capability? For example:
- Are customer acquisition strategies getting new users?
- Are lifecycle strategies reaching current customers?
Eliminate Waste: Cut back on marketing investments misaligned new customer acquisition, current customer retention, and your product store trends.
- Make sure your best stores, customers, products, etc are the primary segments of your marketing mix. Eliminating investments that are not accountable or misaligned to those segments is the easiest way to drive incremental ROI without additional media spending immediately.
Need help auditing your business and marketing data? Let’s grab some time and discuss how to do this.
2. Identify channels that drive new customers/sales (MTA/MMM)
Once completing your initial marketing mix audit & optimization, it’s time to dive deep into your marketing analytics to scale your return on investment.
- Identify which channels, campaigns, or tactics are best at new customer acquisition through first-party multi-touch attribution, media mix modeling, or a matched-market test.
- Shift dollars from lower performers to these channels, campaigns, or tactics.
3. Enhance Customer Retention
- Love your Existing Customers!: Retaining customers is cheaper than acquiring new ones. Develop loyalty programs or exclusive offers for repeat customers. Find out who those repeat customers are through first-party customer & audience analytics.
- Email Marketing: Use your audit to understand how many customers have churned, lapsed, or are about to expire. Create targeted email campaigns for each of these audiences, reminding them of your offerings and encouraging repeat purchases.
4. Test and Iterate (MMT)
Run Tests:
- Continuously A/B test messaging, offers, and visuals to find the most effective combinations.
- Test incremental investments in your most promising campaigns and channels through matched-market testing to get precision insight on the incremental lift
- Don’t forget holdout tests! You can save significant wasted investment by testing a holdout of your most underperforming investments, ensuring you lose no business while trimming waste.
Iterate Quickly:
- Use data to make informed adjustments to campaigns in real-time, optimizing performance without significant additional investment.
5. Set Channel-Level Targets & Budgets (Forecaster)
Predict the performance of incremental investment on your optimized marketing mix.
- Use the insights gained from your attribution, modeling, and testing to estimate each channel’s point of diminishing returns.
- Define Clear Objectives: Establish specific business targets, then budget media spend based on what each channel can deliver towards those targets and in the order of ROI effectiveness.
- Remember high-impact factors & seasonality: For instance, customer demand significantly changes on Black Friday and Cyber Monday – the big tentpole events for the retail industry. Your spend strategy must account for them.
When completed, you should arrive at a plan that will generate increased new customers, and higher customer LTV, all with less overall marketing spend!
6. Repeat for 2025
Post-Mortem Analysis: After Q4, evaluate what strategies drove revenue and which didn’t. Identify lessons learned to improve future campaigns.
Continuous Improvement: Use insights gained to refine your approach for subsequent quarters, ensuring ongoing efficiency.
Final Thoughts
By focusing on efficiency and leveraging existing resources, you can reduce your marketing spend in Q4 while still driving significant revenue. Prioritize what works, optimize for performance, and engage your current customer base to maximize your impact this season. Good luck!
