Risk management in marketing - Avoid loosing money

What is the recipe for success in online marketing?

Test -> Find the most effective ad -> Move your entire budget there -> Reap the benefits. Overall, this is good advice. It makes sense to maximize profits. The problem arises when something major and negative changes in the channel through which you promote yourself and was the only source of customers.

Risk diminution in online marketing - some methods

This year is a bit more atypical in terms of online promotion. Or at least that's how I perceived it. Two main promotion channels - Google and Facebook have fallen sharply in terms of efficiency.

Google has become very expensive - in general because the demand for ads has increased a lot - due to the migration of many budgets online.

Facebook has become more expensive and stupid - literally - because the algorithm has been changed due to legislative requirements imposed by the EU.

Specifically, the Facebook algorithm is not nearly as efficient in achieving its goals as you set it, which translates into a much higher cost. Google is just as effective, but it's much more expensive - that's about it. I know many businesses that relied almost exclusively on one of the two promotion channels and now have major problems looking for viable alternatives.

What exactly does risk management mean?
Risk reduction is one of the main occupations of any professional.

How do you reduce the risk?

Simple - through diversification. Don't put all your eggs in one basket. How does this translate into marketing? Don't spend most of your budget on the same promotion channel.

Basically, you can't control what Facebook, Google, Tik-Tok, one site or another do. BUT, you can diversify your promotion and not just use one promotion channel. 

Recommendations for the Diversification of Promotion Channels

Include in your promotion also channels in which the relationship between you and the potential client is very direct. How? Google, Facebook, Tik-Tok - are channels that are essentially intermediaries between you and the potential customer.

If all of a sudden your Facebook, Twitter, Tik-Tok, etc. account is banned / closed, you are actually left out. Most content is managed algorithmically. If the robot has something with you, it can suspend your account in a second.

What can you do?

You can invest in direct communication channels with your audience and diversify the channels. By far, the most robust communication channels are: Email and SMS.

Other complementary communication channels: Whatsapp - clearly it can fall and it's still Facebook. Or newer meta. Push Notifications

It is no longer in a single social network
No matter how good you are, diversify your profile and promotion.
Sign up for Facebook / Instagram, Linkedin, Tik-Tok and YouTube and Pinterest and more recently Spotify.

What if you only sell well in one network?

Nobody says you have to put in the effort. Is Linkedin working much better than the others? Perfect - allocate 80% of your budget / time there. You will not die if you allocate 20% of the budget to the rest of the networks.

BUT, if linkedin upsets you and the robot bans your account, or explodes the price or I don't know what regulation forbids advertising there, then you run the risk of having big problems if you don't have alternatives.

If it is small, it increases the share of the budget allocated to the site

Your social media account is NOT LEGAL YOURS. You are not the owner. They are.

The site is YOUR LEGAL. Legally your site is more robust than your social media account.

It is good to have as much online presence as possible based on your site. Your site is YOURS.

Invest time in partnerships with other companies that offer complementary services OR are also promoted to your audience

You reinvent the long-forgotten art of collaboration between companies. Define the profile of your client (Buyer Persona) and see what other companies have clients with a very similar profile

    Example: the company that organizes mountain camps collaborates with a ski and sporting goods store
    Example: the company that makes custom furniture collaborates with the company that paints

Invest time in building relationships with your best clients

"80% of the profit is brought by 20% of the customers" and "those who look alike gather"

Do you have some customers who are significantly better than average?

It is very possible that they have very similar friends with them - about the same preferences, about the same standard of living, etc.

Invest in getting closer to the top 20% of your customers and statistically the chance is high to bring you other similar friends.

And when I say investment, I don't mean money. A simple phone call in which to ask what he needs or how you can help him, without necessarily selling him something can be a significant differentiator.