Performance marketing has recently started a buzz in the industry, as more professionals are realising the importance of actionable metrics
. These are the numbers that provide concrete proof that your marketing strategy is converting leads into sales. Vanity metrics
and big fancy jargon just doesn’t cut it anymore. Now, agencies and clients alike are impressed by the results that matter
Here, media update’s
Talisa Carlson reveals what performance marketing is all about. Ready to jump in? Let’s go:
So, what exactly is performance marketing?
This refers to when a team of marketers or advertisers
sit down with their clients and discuss the goals they would like to reach by the end of a certain period of time. Once these objectives have been met, only then
will the client pay the marketing agency.
For example, if a client’s brand gets their desired number of leads, sales or clicks through to their website, this will prove that the marketing team has delivered on their given task. The proof is in the pudding
, as they say!
Why is performance marketing important?
At first, this type of arrangement might seem a bit risky. If the marketing team doesn’t
perform or reach the brand’s objectives, they won’t get paid. But
this is just all the more reason for brands to make use of this type of marketing strategy.
Agencies, you already know how to do your jobs, don’t you? So there’s nothing to fear! Having this approach will not only provide your team with even more purpose and motivation to achieve the brand’s goal, but it will also help your clients feel as if they made the right choice in selecting you as their agency.
With this strategy in place, your team will be determined
to prove that what they are doing actually works. With tried and tested methods already in place, all they really need to do is focus on incorporating the correct tools and strategies to reach the brand’s objective.
It is a win-win
for both parties. It ensures that, from the start, everyone is striving for the same goal, and that all parties will work really
hard to achieve those results.
How does performance marketing pricing work?
If your brand is going the performance marketing route, then you need to start thinking about what you’ll be charging clients for when they work on a campaign with you. So, how does a brand determine where the agency needs to be paid? Well, there are a few pricing options available. These include, but are not limited to, the following
- Cost per click (CPS) — The team will be paid once a consumer clicks on an advertisement. This could be an advert on social media or the client’s website. This works well because it shows that the advertising team has successfully captured your audience's attention.
- Cost per sales (CPS) — Here, the team will only be paid if a lead actually turned into a sale. This could be a risk for the marketer because it is easy for a sale to fall through.
- Cost per installment (CPI) — If your brand has a mobile app, then this payment option will be appealing to you; the client will only pay the agency once a consumer has installed their app on their phone.
- Cost per lead (CPL) — The team will only be paid once a consumer has filled in a form on a landing page containing personal information, such as their name, contact details or email address.
Performance marketing might not be for every brand and agency relationship, but it is a great way to provide your clients with actual proof that your strategies are, indeed, working — and working well
.What are your thoughts on performance marketing? Be sure to let us know in the comments section below.
Now that you know all about performance marketing, be sure to start the process of Understanding the sales funnel [Infographic] to make your strategy foolproof
*Image courtesy of Pexels