Marketing by the Numbers: A Case Study

How do you make business decisions? By gut feel? Consensual vote? Popular opinon? The latest fad? We all do some of this some of the time, but it's definitely not the best method. Particularly when it comes to our marketing decisions…

Most of us have heard the quote: "I Know Half My Marketing Works, I Just Don't Know Which Half".

It's kind of humorous but really not funny when you realise that it's your money we're talking about!  One business is setting an exemplary example in managing their marketing by the numbers.

Base 1, a salon offering hairdressing and massage services, know their numbers inside out. When I spoke to the owner Luka to see how their word-of-mouth marketing program was going, it took just a couple of minutes for him to tell me in precise detail.

"In the last 7 months, we've had 105 people referred through from WOMO and we've had an 80% conversion rate on those."

How does he know this? A clever point-of-sale system helps, but really it's the discipline of asking each customer how they heard of the salon.

But there's more… he goes on to tell me the exact revenue figures from these clients – which calculates to be about 3700% return on his investment! Luka explains his approach to decisions like this…

"We give lots of different marketing ideas a try. We've done printed media, several radio campaigns, flyers, corporate marketing agreements, Yellow Pages, and even some guerrilla marketing techniques. We let them run for 6 months or so, and then we analyse the results and simply eliminate the least effective."

"We've also tried some of the Deal-a-Day type programs but so far our analysis shows that the net effect of these is negative. Although you might get lots of new customers, most are 'voucher-shoppers' and very few return. The business generally has to discount so much that they lose money on the first sale – so unless you can somehow convert them into loyal customers that are willing to pay market rates, these deals just damage your business and your industry."

When asked why he thinks WOMO works so well for them, Luka responds by saying that "WOMO plays to our strong point – customer satisfaction. We pay attention to each customer and ensure that we listen carefully to what they want and deliver great results. WOMO attracts the type of customer that we're great at serving."

So take Luka's advice and start using data to make decisions. It could be the missing piece of the puzzle for business success! Check out Base 1's website here and WOMO listing here.


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