Investors are always advised to diversify their portfolios based on the accepted common sense principle of not putting all your eggs in one basket. By investing in different types of assets you spread your risk - just ask anyone who invested all their money with Bernie Madoff.
This thinking can also be applied to marketing strategies, especially with a new business that hasn’t established which marketing channels are effective. Most new businesses are also usually working with a limited budget so can’t afford to gamble on blowing the entire marketing spend on pitch-side advertising at a football match only to find out most of the target audience are rugby fans. There are exceptions of course and some brands have pulled off a big marketing bet, but it’s a bit like re-mortgaging to put all your money in Bitcoin, would you sleep at night?
So what are the ways that you can diversify your marketing strategy?
One of the more obvious ways to diversify is to use a mix of different marketing channels and platforms. You can combine a number of complementary strategies such as SEO, PPC, podcasts, conventional advertising and even look at media like outdoor or radio ads. You can also look at different platforms within those channels. For example, with PPC there are alternative networks outside of the main players of Google and Facebook especially with niche markets when you can potentially reach more of the right people with better results and often lower spend.
One of the easiest ways to diversify, and one that can have the biggest impact, is to mix up your messaging. You should have clear and consistent brand guidelines in place, but even within those controls - which are there to build brand awareness - you still have the flexibility to change the messaging style within a campaign. There are many examples from leading brands who constantly refresh or change their marketing and advertising. Some of this might not be viable of course in terms of spend, but can be inspirational and emulated conceptually. That’s not to advocate plagiarism; you can’t just swap your logo with Nike’s, but you can look at the creative approach which might be simple and minimalistic, or bright and colourful, or use humour. Global brands spend millions and millions on their marketing, using the best agencies, so they provide the benchmark for creative. It’s good practice to keep tabs on what the market leaders are doing, you can’t copy them but you can incorporate some of the principles of these ideas. Think about your overall style and what kind of messaging do you want to include.
Some businesses and brands have a really focused target audience, but most have multiple audiences, or are flexible in terms of the people they want to appeal to. So if you’re willing to broaden your target audience slightly, or if you have multiple target audiences to work with initially, it’s often advantageous to broaden the scope of your targeting as a form of diversification.
It’s possible to use a mix of different high-level approaches. You can generate leads and win customers with short and direct high-profile campaigns, but you can also build an audience with a sustained and consistent stream of material. Traditional approaches can work alongside more novel guerrilla marketing tactics and a diversified marketing strategy uses a mix of different tactics. It’s important not to forget to do your research - to profile your target audiences, understand them, the channels they use and what messages will appeal. Random marketing rarely works.
Obviously budget is a key factor for any business and even big ones with huge budgets want to see a return on investment. The focus needs to be on ‘bang for buck’ - what marketing is the most effective in terms of spend? Sometimes there’s a compelling reason to invest aggressively to reach more people with a burst of activity such as a seasonal promotion or a need to drum up business quickly. Sometimes it’s about steady engagement over a longer period and often both approaches are utilised, either way it’s important to measure results to make sure you’re spending wisely based on results.
What are the benefits of diversifying your marketing?
Diverse tactics increases brand awareness. Repeated exposure across different channels increases familiarity which subsequently builds trust, it’s why so many brand endlessly repeat ads - the dripping tap effect. If you build your profile across many channels your customers will become familiar with your brand quickly leading to a stronger reputation. You’re able to reach more people in a wider range of different ways and on-board them more successfully as well.
A broader approach should lead to broader reach and appeal. For example, just because the internet has become practically ubiquitous it doesn’t mean everybody uses it all the time. There are still segments of the population that don’t spend that much time online, so if you exclusively invest in digital marketing tactics, you’re never going to reach them. Investing in a wide range of different channels, and targeting multiple audiences will help you reach more people and get through to segments that might otherwise be lost.
Marketing channels don’t usually experience the same volatility as the stock market, but there are still seemingly random ups and downs with different channels. If you’re exclusively invested in one channel and it suffers a big decline, it can affect your entire marketing effort. If your marketing budget is spread out across several channels, any change within a single channel shouldn’t impact your overall results too greatly.
Exposure to different channels leads to more varied and thorough information about your target audiences – and possibly your competitors. Looking at how your targets behave across multiple channels allows you to build more detailed customer profiles which may lead you to challenge preconceptions that might have been holding you back. In order to do this you need to track all the marketing data across all channels you’re currently using.
Competition can always be a threat especially if a competitor becomes really aggressive in your channel as it can drive up prices, possibly lead to losses or even force you to withdraw entirely. This can happen with Adwords if big players start to outbid each other and drive up the pay per click costs. This can have a catastrophic effect if sales are totally reliant on Adwords; for example, we had a boiler installation business approach us a few years who had achieved some great success through PPC, but then British Gas and Boxt started a bidding war and whilst they initially kept upping their spend, it was unsustainable as the cost per lead, and then conversion rates became commercially non-viable ultimately forcing them to leave the market underlining the importance of diversification.
What are negatives of diversifying your marketing?
Having outlined the benefits of marketing diversification, which are certainly worth consideration, there’s inevitably some downsides to bear in mind. As mentioned earlier, marketing is about maximising ‘bang for buck’. You’ll want to minimise spend and effort in areas that aren’t working well and maximize it in areas that do. Ultimately you want to achieve the best return on investment by reducing cost and improving returns. This naturally means cutting inferior strategies in favour of superior ones. However, if that ultimately results in cutting all but one, you end up with a non-diversified strategy by default. For example, if SEO is working really well for you, it’s hard not to push all your marketing spend into it. And that may be the decision and it may work out, but you need to be aware that you’re back into the ‘all your eggs in one basket’ scenario and it only takes Google to update their algorithms and you can slide down the rankings or even disappear altogether - it has happened!
A key counter argument to diversification is focus and specialisation. Many business consultant and marketing specialist extol the benefits of specialisation and focussing solely on what you’re good at, which is sound advice. If your marketing encompasses different strategies simultaneously it can inevitably lead generalisation and a risk of being seen as a jack of all trades. Focusing on one or two niches allows you to develop skills in those areas much faster which can have much stronger long-term potential.
The case for diversification isn’t always unambiguous, but if you want to try to get more out of your marketing strategies through diversifying, it’s advisable to consider the following:
- Work with experts. The better your team or advisors, the better the results will be, regardless of which tactics you use. Try to involve the best people, either in-house or by using specialist marketing agencies, to get better results.
- Don’t rule out specialisation. While diversification is important, it’s also important to specialise in the areas most valuable to your business – and lean heavily toward them. Find the balance for your own business and don’t lose focus.
- Make objective decisions. Look at the data and analyse it to make objective decisions – don’t gamble on whims, gut feeling or random punts, it nearly always ends up with wasted time, effort and money.
- Review and revise regularly. Take the time to review the performance of your marketing effort regularly, to make sure it’s all optimised. You’re very lucky if everything is working 100%, and even if it is, things change and new opportunities emerge so you need to be able to react.
There are lots of approaches to marketing and different strategies, especially in today’s constantly evolving digital world. If you’re only using one strategy you might be limiting your potential and by using diversification, you can each more people and see better results.