Brand Marketing vs Direct Response

Let's talk marketing. What type of marketing works? In this short article, I'll attempt to tackle the confusion around marketing strategies and simplify them into two categories: Brand Marketing and Direct Response Marketing. Or... what doesn't work and what does work.


Normally, when you mention marketing to somebody they put all marketing & advertising under the same umbrella. They believe they're a little different, but they generally think radio ads, tv commercials, facebook ads, print, google ads, SEO, website design, graphic design and more, are all the same. The truth is that these things are all marketing mediums while what I want to discuss in this article is marketing philosophy.


Marketing is extremely diverse and putting it all under the same umbrella is kind of like saying that all business is the same. Each of these different mediums (e.g. Facebook Ads) could have its own college course. And it's more about how you use the medium than the marketing medium itself. Some Facebook ads are good while others are not. Some tv commercials work while others completely miss the mark. People tend to half heartedly try something and then go on to say that the whole medium doesn't work, even if there are plenty of other people out there succeeding on the same medium.


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This is where marketing philosophy comes into play and why it's more important than the medium itself. There's two main marketing philosophies and they can work in conjunction with one another. But I believe that one is far superior to the other.


Let's talk about the first marketing philosophy... Brand Marketing.


When people think "marketing", Brand Marketing is what they generally think about. The super bowl commercials, big billboards, fancy logos & slogans, radio ads and catchy jingles. Brand Marketing is all about awareness and reach. It's about getting the story of the business in front of as many eyeballs as possible and telling that story in the most appealing way possible. It sounds great and it can work for big fortune 500 companies. The problem is that most businesses are not big fortune 500 companies and these fortune 500 companies didn't get to where they're at by using this strategy. Therefore, most businesses cannot use this strategy successfully.


Most people try to emulate this same awareness strategy and they take a Brand Marketing approach, but it ends up being extremely diluted and doesn't pack the same punch. The Brand Marketing approach is expensive and built for a company that already has a proven offer, which has gone mainstream and is in stores everywhere. The reason it can work for a fortune 500 company is because they're using something called an availability heuristic to their advantage. An availability heuristic is a shortcut that buyers use when making purchasing decisions, where they purchase the item that comes to their mind first and trust that item more than the alternatives because of it.


For most businesses, it can be dangerous to put most of your marketing attention on the Brand Marketing approach because it measures awareness and not real results. Examples of small businesses using this approach can be found frequently on social media. I see more and more small businesses posting about what they do and about their story. They prioritize getting loads of content out there, making sure their brand looks pretty with the perfect logo and website, and everything other than the most important thing... sales.

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The main difference between Brand Marketing and Direct Response Marketing is in what you are measuring. The Direct Response Marketing philosophy doesn't pay much attention to vanity metrics (Awareness, reach, comments, followers, likes, shares, views, etc.) These vanity metrics all sound nice, but the questions Direct Response Marketers always come back to are, "Did this lead to sales? What was our direct return on this investment? If we spend $1 how many dollars do we get back?" For most businesses, it is absolutely critical to take this approach to your marketing. Implementing this will allow you to grow your business with predictability. If you can put $1 in and get $5 back, then you can put $1000 in and get back $5000.


In order to take a Direct Response mindset into your marketing strategy, there are a few key things you need to do.


The first thing is to have a full understanding of your numbers. This sounds simple, but you'd be shocked to find out how many business owners don't know their numbers. The first number you need to know is the profit you make off of the lifetime of a new client. How much is a new client worth to you after all your expenses are paid?


Knowing this will lead you into the second step, which is to reverse engineer the results you're looking to achieve and then set up easy KPIs (Key Performance Indicators) to help you achieve them. Here's an example... Let's say we know our numbers and we understand that after all of our expenses, every new client we get has a lifetime value of $2000 to us. In order to reverse engineer this, you need to figure out what your willing to spend to acquire a new customer (Customer Acquisition Cost). Are we willing to spend $500 to make $2000 back? That's a 4:1 return. As a rule of thumb, aim for anywhere from a 3:1 to 10:1 return. A very important thing to understand is that this goal is based on a cash return. How long does it take you to see the full amount of money that the client is worth? Are they paying upfront for the service you're offering? Receiving more cash upfront, as opposed to having a lot of outstanding accounts receivable, should always be prioritized. Receiving more cash upfront allows you to invest more money to acquire new clients and not have to wait or stop the spending.


Now, when you have an understanding of your ideal customer acquisition cost you need to keep reverse engineering until you have a key performance indicator that you can track. This number needs to be easy to check and normally that number would be your cost per lead (someone's name, phone number and email, who is interested in your service). Let's say you have a goal Customer Acquisition Cost of $500. So you're willing to spend $500 to acquire a new client that's worth $2000. And you know that on average, 1 out of every 10 leads will turn into a new client. This would mean that you're willing to spend around $50 per lead (If you got 10 leads at $50 a lead, then you spent $500 and should've converted 1 for $2000). So, if we reverse engineered this back to our Cost Per Lead. We know that we are willing to spend $50 to get a new lead and that would be our Key Performance Indicator, so anything over that is too much and anything under that is good. That's how we reverse engineer the results were looking for and know when we're on track or not.


After you've figured out your numbers and the goal Key Performance Indicator, you need to come up with an irresistible offer that will get people to give you their information. The message that you put out to your target audience should have an exciting offer, a reason why the buyer needs the offer and a clear call to action (something that tells them to give you their information for the offer or contact you to receive it). Having this in your advertising will allow you to get leads that are within your KPI, and in return, allow you to crush your business goals.


This is a simple explanation of the Direct Response Marketing philosophy and why I believe that it is far superior to the Brand Marketing approach that so many take. The Brand Marketing approach can come after the Direct Response approach, once you've created a system to grow consistently and predictably, but it should never come before it.


Hopefully this advice helps you market your health business and find new clients. The Direct Response Marketing approach is not an easy one. It's the road less traveled for a reason, but figuring it out will allow you to flourish and help more people with your business than you could ever imagine.

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