Marketing Canvas - Budget

Last update: 10/12/2024

In a nutshell

Discover the importance of a well-structured marketing budget in our comprehensive guide. We delve into the critical role of budgeting within the Marketing Canvas method by Laurent Bouty. Learn how to track and manage marketing expenses, whether you're a multinational corporation or a budding startup. Understand the significance of budgeting in terms of industry benchmarks, and discover strategies to spend wisely. Our guide offers practical tools to translate your budget into action, from understanding your audience to tracking expenses effectively. Moreover, learn to evaluate and improve your budgeting practices with our score-based self-assessment. Lastly, get inspired by a real-life example of green clean use case. Whether you're a marketing novice or an entrepreneur seeking new insights, this article offers an essential exploration of the powerful tool that is your marketing budget.

In the Marketing Canvas

The Marketing Canvas is a powerful tool for entrepreneurs and non-marketers to build a robust marketing strategy. It consists of six meta-dimensions, each with four sub-dimensions, for a total of 24 sub-dimensions defining your Marketing Strategy. One of these sub-dimensions is BUDGET, which falls under the METRICS meta-category.

Defining Budget

The Marketing Canvas model proposed by Laurent Bouty offers an in-depth methodology to conceptualize and structure your marketing plan. The fundamental section Bouty underscores is "Metrics," and the sub-dimension "Budget" within it. This sub-dimension serves as a barometer to quantify and keep track of your marketing expenditure, a crucial determinant of your company's marketing efforts' overall success.

The Budget dimension's relevance is ubiquitous, regardless of your company's size. For larger conglomerates, where tracking expenses becomes a standard protocol, marketing becomes an essential cog in the wheel. Conversely, smaller entities like startups or SMEs may not implement such stringent measures, overlooking the importance of earmarking a designated marketing budget, which could potentially hinder growth.

Renowned benchmarks, Gartner and CMOsurvey, offer a broad understanding of how companies, across industries and sizes, allocate their marketing budgets. These benchmarks divulge that, on average, about 11% of the yearly budget is dedicated to marketing expenditure. An alternative way of approaching this is by calculating the ratio between your marketing budget and your revenue. The marketing budget generally represents 6% to 10% of your revenue, a number that can fluctuate depending on your revenue size.

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Marketing Canvas Method by Laurent Bouty - Marketing Budget

As per the industry suggestions, startups could consider setting aside up to 20% of the anticipated gross revenue for the marketing budget. However, the crucial takeaway here is that it is not solely about allocating funds to marketing, but ensuring that these funds are utilized judiciously. This involves associating your expenses with your actions – if you plan to perform action X to achieve objective Y, how much will Z (the budget) amount to?

Underutilizing your marketing budget can pose problems. It may create a negative impression of your leadership, indicating a lack of execution on planned strategies. Similarly, if your marketing budget falls below the market average, it may indicate under-investment compared to your competitors, acting as an impediment to your business's growth.

A survey by Sortlist conducted in 2021 revealed that the Covid19 pandemic had either positively or negatively impacted the marketing budget for SMBs. On average, the annual budget hovered around a maximum of 10,000€ for 50% of the companies surveyed. However, this figure only accounted for media and content expenses, excluding human resources and platform investments.

Tools for Budget

Having a well-planned budget is a keystone to any successful marketing strategy. However, to implement this successfully, certain tools can provide a great deal of assistance. Software platforms like QuickBooks, Zoho Books, or Sage 50cloud are excellent options for maintaining and tracking your budget. They not only help you keep your budget in check but also ensure the finances are appropriately aligned with your marketing goals.

Spreadsheets can also play a significant role in managing your budget. They provide a straightforward and uncomplicated way to input and track your budget figures. Excel or Google Sheets, with their various functions, can aid in organizing and categorizing your budget.

Moreover, platforms like HubSpot offer a dedicated Marketing Hub that includes budget management tools within their software. This feature enables companies to plan, track, and measure their marketing budgets and ROI from a single platform.

Translating Budget into Action

Translating your budget into action entails strategic decision-making. It involves a deep understanding of your audience and consistent engagement, preparedness for budget variability, consideration of the marketing lifecycle, tracking expenses, and balancing creativity with cost.

For instance, if your target audience is primarily online, then directing a significant portion of your budget to digital marketing would be a wise decision. However, for a local audience, traditional advertising methods, such as billboards or local press, may be more effective.

Maintaining consistency in your marketing approach can result in more significant outcomes than sporadic, high-cost campaigns. This strategy requires planning for sustained engagement with your audience.

Marketing budget needs can change with time. It is vital to remain flexible and adapt your budget based on business needs, market trends, and campaign results.

In marketing, some initiatives, like SEO or content marketing, may take a longer time to deliver results. It's crucial to account for these long-term strategies in your budget, alongside short-term ones.

By using accounting or budgeting software, you can keep an accurate record of your marketing expenditures. This data can provide valuable insights for future budgeting decisions.

While high-cost campaigns may appear more attractive, the most creative ideas are often the most cost-effective. Always seek to balance creativity and budget constraints.

Statements for self-assessment

Is your Marketing Budget helping you achieve your goals?

Evaluating the effectiveness of your marketing budget is a critical step towards its optimization. Here, you assess if your budget is helping you reach your goals.

For a comprehensive evaluation, rate your agreement with the following statements on a scale from -3 (completely disagree) to +3 (completely agree):

1. Your marketing budget allocation is based on several factors, including your industry sector, your business capacity, your goals, and how quickly you need to make an impact.

2. Your marketing budget is a component of your overall business plan, outlining the costs of how you are going to achieve your marketing goals within a certain timeframe.

3. You constantly monitor your marketing efforts. If something in your marketing plan is not working, you move that spending into another area.

4. You leave a portion of your budget (10%?) in exploring new ways, figuring out what works and what doesn’t, and exercising your creative muscles

Each of these statements evaluates a critical aspect of your marketing budget. Your scores would indicate which areas need improvement, and which areas are effectively managed.

Marketing Canvas Method - Question - Marketing Budget

Interpretation of the scores

• Negative scores (-1 to -3): Indicate significant gaps in your budgeting process. Resource allocation may lack strategic alignment, monitoring may be insufficient, and there may be little or no investment in innovation.

• A score of zero (0): Reflects partial effectiveness. While the budget is functional, it may not be fully aligned with goals, flexible, or innovative enough to drive optimal results.

• Positive scores (+1 to +3): Suggest a well-optimized budget strategy. Allocation is strategic, monitoring is robust, and there is a deliberate focus on testing and innovation.

Case Study: Green Clean’s Budget strategy

• Misaligned understanding (-3, -2, -1): Green Clean allocates its marketing budget without clear alignment to business goals. The budget lacks flexibility, with no resources reserved for experimentation, leading to stagnation in results.

• Surface understanding (0): Green Clean allocates a functional budget aligned with its business plan but struggles to reallocate funds from underperforming initiatives. There is minimal investment in innovation, limiting growth potential.

• Deep understanding (+1, +2, +3): Green Clean’s budget is strategically allocated across campaigns, aligned with business goals, and includes 10% for experimentation. Performance is closely monitored, with resources reallocated dynamically to maximize impact.

Conclusion

The Budget sub-dimension emphasizes the importance of strategic allocation, continuous monitoring, and innovation in marketing. A well-structured budget not only aligns with business goals but also ensures flexibility and encourages creative exploration, enabling sustainable growth and competitive differentiation.

Sources

1. Gartner CMO Spend Survey 2020-2021, Gartner, https://www.gartner.com/en/marketing/research/annual-cmo-spend-survey-research

2. CMO Survey 2020, Deloitte, pdf, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/CMO/us-cmo-survey-highlights-and-insights-report-feb-2020.pdf

3. Sortlist, 2021 Marketing Survey: Budgets, Trends and Inspiration for SMBs, https://www.sortlist.com/blog/marketing-survey-smbs-budgets-trends-inspiration/

4. Medium, 5 Steps to Creating a Small Business Marketing Budget, https://medium.com/@the_manifest/5-steps-to-creating-a-small-business-marketing-budget-2f807065068a

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Marketing Canvas - Lifetime

Last update: 10/12/2024

In a nutshell

This comprehensive guide delves into the significance of Average Revenue Per User (ARPU) as a potent metric in business success. Through this exploration, businesses can better understand how much revenue they generate per user and how they stack up against industry competitors. The article not only explains how to calculate and evaluate ARPU but also provides practical strategies to leverage it for sustainable growth. This includes segmenting customer bases, forecasting revenues, and even assessing the effectiveness of various growth strategies like upselling or price optimization. To illustrate the concepts, the article incorporates a real-world case study from the green cleaning industry. Whether you're an entrepreneur, marketer, or non-marketer interested in business strategy, this guide equips you with the knowledge and tools to transform ARPU from a simple number into actionable business insights.

In the Marketing Canvas

The Marketing Canvas is a powerful tool for entrepreneurs and non-marketers to build a robust marketing strategy. It consists of six meta-dimensions, each with four sub-dimensions, for a total of 24 sub-dimensions defining your Marketing Strategy. One of these sub-dimensions is LIFETIME, which falls under the METRICS meta-category.

Defining Lifetime

Customer Retention has become a pivotal concern for subscription-based businesses in recent years. The idea of prolonging your subscribers' association with your business becomes indispensable if the ultimate objective is to generate profits. The long-established belief is that retaining existing customers is more cost-efficient than acquiring new ones, typically by a ratio of 1 to 6. Although the ratio might differ, we can all concur that spending money to acquire new customers is higher than retaining existing ones. Either way, the effect on your customer base is the same (+1 customer -1 lost or evading the loss of 1 customer). We often use the concept of churn (or attrition) to gauge the number of customers departing from your service during a specified period.

Churn rate, a critical metric, represents the percentage of customers discontinuing a company's product or service over a given timeframe. This metric is critical because it provides insights into the health of a company's customer base and its ability to retain its customers. Calculating the churn rate involves dividing the number of customers lost during a specific time period (e.g., a quarter) by the number of customers the company had at the beginning of that time period.

Monitoring churn rate is paramount for companies as it offers a clear image of the number of customers leaving the company, which directly impacts the company's profitability. A high churn rate could signify subpar customer service, inadequate product offerings, or even stiff competition in the market. Hence, it becomes imperative for companies to pinpoint the reasons behind a high churn rate and initiate corrective measures to curtail it.

Furthermore, tracking customer churn enables companies to evaluate how effectively they are retaining their customer base, thereby helping them adjust their customer retention strategies. Companies can exploit customer data to better comprehend their customers' needs, preferences, and behaviors, and modify their offerings and services to meet those needs. By proactively addressing the factors driving churn, companies can cultivate a more loyal customer base and secure long-term success.

Lifetime is an alternative perspective on this phenomenon. Lifetime refers to the duration (often in months) a customer stays with you. The exact specification of this definition can vary across different industries. For instance, in the mobile business, a customer must have received or made a call/SMS/data transaction during the specified period to be considered "active." One method to estimate the lifetime is by dividing 1 by your churn rate percentage. Lifetime is indicative of how successful you are at satisfying existing customers.

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Marketing Canvas Method by Laurent Bouty - Lifetime

In the Marketing Canvas framework, we consider Lifetime as a pivotal metric. It's not a standalone number but tied intricately to your business objectives. Let's explore how it works in a scenario.

Imagine owning a business that generates €1000 a month from 1000 customers, with each spending €1. If you have a churn rate of 10%, you would lose 100 customers by the end of the first month, reducing your customer base to 900. Consequently, your revenue for the month drops to €900, presuming that the remaining customers continue to spend €1 each.

If the trend continues, you'll witness another 10% reduction in customers, leading to the loss of 90 more customers, and leaving you with only 810 customers. The impact on your revenue will be corresponding, reduced to €810. This continuous decline in revenue has a direct bearing on your business goals, making it increasingly challenging to generate profits, let alone achieve growth, when the customer base is shrinking rapidly.

To balance the loss of customers and stabilize revenue, you would need to acquire new customers at a rate faster than you are losing them. This, however, can be a costly and time-consuming task. Therefore, customer retention becomes a cornerstone for the long-term sustainability of your business.

Tools for Lifetime

A plethora of tools exist in the market today, aimed at aiding businesses in calculating and improving the lifetime of their customers.

1. Customer Relationship Management (CRM) Systems: CRM systems like Salesforce or HubSpot help businesses track and manage customer interactions, allowing them to understand better and increase customer lifetime value.

2. Subscription Management Platforms: Platforms like Chargebee or Zuora help businesses manage their subscription billing and provide insights into metrics such as churn rate and customer lifetime value.

3. Customer Analytics Platforms: Tools like Mixpanel or Amplitude allow businesses to track user behavior and engagement, enabling them to identify potential churn risks and take proactive measures.

4. Customer Feedback Tools: Tools like SurveyMonkey or Qualtrics allow businesses to gather feedback directly from customers, helping them understand the reasons for customer churn and find ways to improve customer retention.

Translating Lifetime into Action

Transforming the concept of 'Lifetime' into tangible action involves a thorough understanding of your customer base, their needs, their behaviours, and effectively addressing their pain points.

1. Segment Your Customers: Divide your customer base into segments based on their behaviour, usage, or revenue generated. This allows you to understand the different types of customers you have and develop strategies tailored to each segment.

2. Develop Customer Retention Programs: Develop strategies aimed at improving customer loyalty. This could be through a loyalty rewards program, personalized communication, or by improving customer service.

3. Identify At-Risk Customers: Use predictive analytics to identify customers who are at risk of churning. Once identified, you can take proactive measures to retain them.

4. Improve Customer Experience: Regularly review and improve your product or service based on customer feedback. Ensuring a high-quality customer experience is one of the best ways to improve customer lifetime.

Statements for self-assessment

Is the Lifetime of your users helping you achieve your goals?

It is crucial to evaluate whether your user lifetime is aiding you in achieving your business goals. For a comprehensive evaluation, you can rate your agreement with the following statements on a scale from -3 (completely disagree) to +3 (completely agree):

1. You are capable to measure user's lifetime (1/churn) because you know who is buying and using your products and services.

2. Your churn level is below or equal to average market churn level

3. The historical trend of your churn evolution is positive (growth) and present a positive outlook for next year. 

4. Your CRC (Customer Retention Cost) is aligned with your CAC (Customer Acquistion Cost). CAC+CRC is 20-30% for mature business and 50-70% for startups (% of revenue).

Your scores can help pinpoint areas of strength and those requiring attention. The higher the score, the more effective your customer retention strategy is, and vice versa. It's always a good practice to revisit these scores periodically to gauge improvement or diagnose worsening situations.

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Marketing Canvas Method - User Lifetime and Churn

Interpretation of the scores

• Negative scores (-1 to -3): Indicate significant gaps in measuring or optimizing customer lifetime. High churn rates, poorly aligned CAC and CRC, or negative historical trends suggest the need for immediate intervention.

• A score of zero (0): Reflects partial effectiveness. While some aspects of lifetime strategy are functional, inefficiencies in retention efforts or unclear data may limit overall impact.

• Positive scores (+1 to +3): Suggest a well-optimized lifetime strategy. Churn is low, retention costs are aligned with CAC, and historical trends indicate sustainable growth and profitability.

Case study: Green Clean’s Lifetime strategy

• Misaligned understanding (-3, -2, -1): Green Clean does not track churn accurately and struggles to identify who is using its services. Retention efforts are costly, uncoordinated, and misaligned with CAC, resulting in unsustainable operations.

• Surface understanding (0): Green Clean measures churn but lacks actionable insights. While CAC and CRC are within acceptable ranges, historical trends show inconsistent retention efforts, limiting future growth potential.

• Deep understanding (+1, +2, +3): Green Clean accurately measures churn and tracks customer lifetime. It reduces churn through personalized engagement and aligns CAC and CRC efficiently. Historical trends show consistent improvement, supported by sustainable retention strategies.

Conclusion

The Lifetime sub-dimension emphasizes the importance of tracking and optimizing customer lifetime to ensure sustainable growth and profitability. By reducing churn, balancing CAC and CRC, and analyzing historical trends, businesses can build stronger customer relationships and achieve long-term success.

Sources

1. HUBSPOT, What is customer churn, https://blog.hubspot.com/service/what-is-customer-churn

2. HBR, The Value of keeping the right customers, https://hbr.org/2014/10/the-value-of-keeping-the-right-customers

3. Hubspot, Here’s Why Customer Retention is So Important for ROI, Customer Loyalty, and Growth, https://blog.hubspot.com/service/customer-retention

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Marketing Canvas - ARPU

Last update: 27/12/2024

In a nutshell

This comprehensive guide delves into the significance of Average Revenue Per User (ARPU) as a potent metric in business success. Through this exploration, businesses can better understand how much revenue they generate per user and how they stack up against industry competitors. The article not only explains how to calculate and evaluate ARPU but also provides practical strategies to leverage it for sustainable growth. This includes segmenting customer bases, forecasting revenues, and even assessing the effectiveness of various growth strategies like upselling or price optimization. To illustrate the concepts, the article incorporates a real-world case study from the green cleaning industry. Whether you're an entrepreneur, marketer, or non-marketer interested in business strategy, this guide equips you with the knowledge and tools to transform ARPU from a simple number into actionable business insights.

In the Marketing Canvas

The Marketing Canvas is a powerful tool for entrepreneurs and non-marketers to build a robust marketing strategy. It consists of six meta-dimensions, each with four sub-dimensions, for a total of 24 sub-dimensions defining your Marketing Strategy. One of these sub-dimensions is ARPU, which falls under the METRICS meta-category.

Defining ARPU

ARPU, an acronym for Average Revenue Per User, holds significant weight in mobile telecom businesses and, indeed, any business that operates on a user-based model. This value-oriented metric is calculated by dividing the total revenue by the number of active users within a specific time frame, typically a month. The active users, in this context, generally refer to paying customers.

At its core, ARPU is a simple and unambiguous measure that facilitates direct comparisons with competitors, customer base segmentation, and financial forecasting. A business with a higher ARPU, assuming all other factors are constant, enjoys superior profitability.

ARPU's importance is twofold. Firstly, it serves as a testament to a business's customer-centricity, if measured accurately. A company that keeps track of its ARPU has a precise understanding of which clients contribute most significantly to their revenues (the top 10%), and those whose contribution is more modest (the bottom 10%). This metric also reveals the elements contributing to the revenues for each client.

Secondly, a strategy that focuses on improving ARPU is an effective approach to business growth. In the Marketing Canvas framework, we assess whether your ARPU aligns with and advances your business goals. A low ARPU, in comparison to your competitors, implies that each new customer acquired will generate less revenue than a new customer for your competitors. This scenario represents a hurdle that may be overcome by attracting more high-value customers through a stronger brand and value proposition.

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Marketing Canvas Method - Metrics - ARPU

Guidelines

• ARPU provides an easy, high-level benchmark to compare how much revenue one company generates from its users relative to another.

• Examining ARPU by customer segments can yield valuable insights, particularly when paired with other metrics.

• Many financial models start by forecasting your user numbers based on customer acquisition and retention assumptions. By multiplying this number by your ARPU, you can generate a revenue forecast.

Tools for ARPU

Calculating and tracking ARPU is straightforward, but requires the right tools. Revenue tracking software and business intelligence platforms can facilitate the process by automatically calculating ARPU over a given time period. Tools like Tableau, Microsoft Power BI, or Google Analytics are widely used for this purpose. It's crucial to ensure that these tools integrate seamlessly with your accounting or CRM systems to deliver accurate results.

Customer segmentation tools can also be helpful in analysing ARPU across different groups. For example, you might find that customers in a particular geographic area or of a certain age group have a higher ARPU. You can then focus your marketing efforts on attracting more of these high-ARPU customers.

Translating ARPU into Action

After calculating and analysing ARPU, it's time to leverage this metric to inform strategic decisions. A high ARPU relative to your competitors suggests a strong value proposition and efficient monetization. Conversely, a low ARPU may indicate the need for improvement.

If your ARPU is lower than desired, consider strategies such as upselling or cross-selling to existing customers. You could also revise your pricing strategy or explore new revenue streams. For instance, a SaaS company with a low ARPU might consider launching a premium tier of service.

Another way to increase ARPU is by refining your marketing efforts to attract high-value customers. By analyzing customer segments, you can identify the characteristics of your highest-value customers and then target similar prospects.

Statements for self-assessment

Is the ARPU of your users helping you achieve your goals?

Assessing ARPU is vital to gauge whether it aids in attaining your objectives. To evaluate comprehensively, rate your agreement with the below statements on a scale from -3 (completely disagree) to +3 (completely agree):

1. You are capable to measure Average Revenue per User because you know who is buying and using your products and services.

2. The average purchase frequency of your users is above industry average and above direct competitors. 

3. The average spending of each purchase of your users is above industry average and above direct competitors. 

4. The historical trend of your ARPU evolution is positive (growth) and present a positive outlook for next year. 

In addition to these statements, consider how ARPU interacts with other important metrics like Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLTV). For example, a high ARPU is even more beneficial if it is combined with a low CAC, leading to a high CLTV/CAC ratio.

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Marketing Canvas Method - Metrics - ARPU

Interpretation of the scores

• Negative scores (-1 to -3): Indicate significant gaps in understanding or optimizing ARPU. You may lack the data or strategies needed to measure purchase behavior, spending, and trends effectively, resulting in missed growth opportunities.

• A score of zero (0): Reflects partial effectiveness. While ARPU is tracked, there are inconsistencies in measurement or missed opportunities for improvement. Additional focus on frequency, spending, or sustainability is needed.

• Positive scores (+1 to +3): Suggest a strong ARPU strategy. Metrics are well-tracked and aligned with business goals, exceeding industry benchmarks while supporting long-term customer value and sustainability.

Case study: Green Clean’s ARPU strategy

• Misaligned understanding (-3, -2, -1): Green Clean lacks clear data on who buys and uses its products. Purchase frequency is sporadic, spending per transaction is low, and historical ARPU trends show stagnation or decline.

• Surface understanding (0): Green Clean measures ARPU but struggles to align it with industry benchmarks. While some strategies to improve purchase frequency or spending exist, they lack consistency or long-term planning.

• Deep understanding (+1, +2, +3): Green Clean uses customer data to track ARPU effectively. The brand encourages frequent purchases through a subscription model and increases average spend with bundle offers. Historical ARPU trends show steady growth, and future projections align with the company’s sustainability goals.

Conclusion

The ARPU sub-dimension is critical for understanding and optimizing revenue per user. By accurately measuring ARPU, analyzing trends, and implementing strategies to improve frequency and spending, businesses can drive growth and ensure long-term success. Aligning ARPU with sustainability principles further reinforces customer loyalty and brand integrity.

Sources

1. Definition, Investopedia, https://www.investopedia.com/terms/a/average-revenue-user-arpu.asp

2. HUBSPOT, ARPU: How to Calculate and Interpret Average Revenue Per User, https://blog.hubspot.com/service/arpu

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Marketing Canvas - Acquisition

Last update: 15/06/2023

In a nutshell

This article dives deep into the intricacies of Customer Acquisition, a critical aspect of any marketing strategy. It defines key performance indicators - Customer Acquisition Rate (CAR) and Cost of Customer Acquisition (COCA or CAC), and elucidates their relevance and calculation methods. The importance of measuring these metrics is brought to life using practical examples and industry insights. The piece further delves into the arsenal of tools available for customer acquisition, and how these can be effectively harnessed to drive growth. From there, we outline how to turn acquisition strategies into action, evaluate their performance, and make necessary improvements. Through the lens of a real-world 'Green Clean' use case, we demonstrate the practical application of these principles. An essential read for entrepreneurs and marketers aspiring to master the art of customer acquisition.

In the Marketing Canvas

The Marketing Canvas is a powerful tool for entrepreneurs and non-marketers to build a robust marketing strategy. It consists of six meta-dimensions, each with four sub-dimensions, for a total of 24 sub-dimensions defining your Marketing Strategy. One of these sub-dimensions is ACQUISITION, which falls under the METRICS meta-category.

Defining ACQUISITION

Every successful venture has customer acquisition as its cornerstone metric. The reality is, regardless of how innovative or unique your product or service may be, its relevance is directly proportional to the number of users it attracts and retains. Hence, we will delve deeper into the concept of Acquisition, one of the sub-dimensions of the Marketing Canvas, in this chapter.

Acquisition, as it pertains to marketing, refers to the process of attracting and converting potential consumers into actual customers. A healthy business is characterized not just by acquiring more users but also transitioning them into paid customers, thereby increasing revenue and profitability. It's worth mentioning that the current 'Growth Hacking' trend has reinforced the emphasis on acquisition strategies.

Measurement of Customer Acquisition occurs via two key performance indicators (KPIs):

1. Customer Acquisition Rate (CAR): This is the ratio of the number of customers acquired to the length of the time period.

2. Cost of Customer Acquisition (CAC): This represents the total expenditure on marketing efforts divided by the number of customers acquired during that period.

Both CAR and CAC play crucial roles in comprehending the speed at which you're gaining new customers and the investment required to achieve this. According to marketing guru Neil Patel, CAC signifies the cost involved in convincing a potential customer to purchase a product or service. Comparing your CAC per media to industry standards and competitors will provide an insight into your performance.

If your CAR falls below your competitors, it implies a slower customer acquisition rate. Although this isn't a cause for immediate alarm, considering other dimensions like Average Revenue Per User (ARPU) will help understand if it is a serious issue or not.

Some may argue that these metrics are only applicable to service businesses, not products. However, the underlying philosophy of the Marketing Canvas is to thoroughly understand your customers, be it a product or service. If your business relies on indirect distribution and lacks customer data, it might hinder personalizing your offerings. Inability to measure CAR and CAC due to a lack of direct customer interaction is a stumbling block in the application of the Marketing Canvas Method.

Tools for ACQUISITION

Effective acquisition isn't a matter of luck or chance; it's the result of strategically leveraging an array of tools and techniques. Here are a few tools that can significantly improve your acquisition metrics:

1. SEO Tools: Platforms like Moz, SEMrush, and Google's Keyword Planner can help you optimize your online presence and improve organic traffic, leading to higher acquisition.

2. Content Marketing Tools: Tools like HubSpot, WordPress, and Grammarly can assist in creating compelling content that drives customer interest and engagement.

3. Social Media Advertising: Platforms like Facebook Ads Manager and LinkedIn Campaign Manager can help you reach a wider audience and target potential customers more effectively.

4. Email Marketing: Tools like Mailchimp or ConvertKit can help you build and maintain relationships with potential customers, fostering trust and improving acquisition rates.

Translating Acquisition into Action

Once you've mastered the principles and tools of acquisition, it's time to put this knowledge into practice.

1. Set Clear Goals: Begin by identifying specific, measurable, achievable, relevant, and time-bound (SMART) goals for your acquisition efforts.

2. Identify Your Audience: Understand your potential customers, their needs, and their preferences.

3. Optimize Your Channels: Improve your visibility on all the platforms your target audience frequents.

4. Test, Measure, Refine: Regularly review your CAR and CAC metrics, identify areas of improvement, and refine your strategy accordingly.

Statements for self-assessment

Is the Acquisition of new users helping you achieve your goals?

Evaluation is the pillar on which successful businesses are built. Regular monitoring and reassessment are essential to improving your acquisition strategy. To evaluate your acquisition efforts, consider the following statements, rating your agreement from -3 (completely disagree) to +3 (completely agree):

1. Your Customer Acquisition Cost (CAC) is below industry average and is below your direct competitors.

2. Your conversion rate (from lead to buyer) is above industry average and is above your direct competitors.

3. Your CLTV/CAC is above industry average with a ratio above 3:1 and below 5:1

4. Your time to conversion rate (from lead to buyer) is above industry average and is above your direct competitors.

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Marketing Canvas Method - Metrics - Acquisition by Laurent Bouty

Interpretation of the scores

• Negative scores (-1 to -3): Suggest inefficiencies in your acquisition strategy. CAC may be high, conversion rates low, and CLTV/CAC ratios misaligned, indicating missed opportunities for improvement.

• A score of zero (0): Reflects a functional but unoptimized strategy. While some metrics may meet industry benchmarks, there are gaps preventing full efficiency and profitability.

• Positive scores (+1 to +3): Indicate an effective acquisition strategy with competitive CAC, high conversion rates, a healthy CLTV/CAC ratio, and short time-to-conversion periods.

Case study: Green Clean’s Acquisition strategy

• Misaligned understanding (-3, -2, -1): Green Clean’s CAC is significantly higher than competitors, with low conversion rates and a CLTV/CAC ratio below 3:1. The time to conversion is long, indicating inefficiencies in the sales funnel.

• Surface understanding (0): Green Clean’s CAC and conversion rates are in line with industry averages but lack optimization. The CLTV/CAC ratio is acceptable but not optimized for long-term growth. Time to conversion is adequate but could be reduced with better targeting.

• Deep understanding (+1, +2, +3): Green Clean optimizes CAC by focusing on high-performing channels and using automation. Conversion rates are improved through a streamlined funnel and personalized engagement. The CLTV/CAC ratio exceeds 4:1, and time to conversion is reduced through quick onboarding and targeted offers.

Conclusion

The Acquisition sub-dimension highlights the importance of optimizing CAC, conversion rates, CLTV/CAC ratios, and time to conversion for sustainable growth. A well-executed acquisition strategy ensures that your business attracts the right customers, maximizes profitability, and remains competitive in the market.

Sources

1. Neil Patel, Customer Acquisition Cost, https://neilpatel.com/blog/customer-acquisition-cost/

2. Hubspot, https://blog.hubspot.com/blog/tabid/6307/bid/34054/the-6-marketing-metrics-your-ceo-actually-cares-about-cheat-sheet.aspx

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Marketing Canvas - Media

Last update: 15/6/2023

In a nutshell

This comprehensive guide delves deep into the role of media in marketing, helping entrepreneurs and marketers, novice or experienced, understand the subtleties of different media channels and how they can be leveraged for success. We explore Owned, Earned, Shared, and Paid media, providing examples and practical tips for each. This guide also outlines how to translate these theories into effective actions and offers a scoring system for evaluating your current media strategy. It covers potential reasons behind scores and offers insights for strategic improvement. The article concludes with a case study from Green Clean to illustrate how a well-executed media strategy can propel a business forward. This guide serves as an essential read for anyone looking to harness the power of media in their marketing strategy.

In the Marketing Canvas

The Marketing Canvas is a powerful tool for entrepreneurs and non-marketers to build a robust marketing strategy. It consists of six meta-dimensions, each with four sub-dimensions, for a total of 24 sub-dimensions defining your Marketing Strategy. One of these sub-dimensions is MEDIA, which falls under the CONVERSATION meta-category

Defining Media

In any given relationship, communication is vital. The same is true for your business, where the exchange of messages is constant between you and your audience—your prospects, clients, customers. You initiate conversations using your stories and content. But where do these discussions take place? This leads us to a rather colossal industry that encapsulated $629 billion in 2018: media advertising.

A look into the past reveals how companies carpet-bombed potential and existing clients with advertising—a unidirectional monologue that is now more commonly referred to as "Push Communication." As times evolved and technology advanced, the internet and digital marketing gave birth to a more targeted and pertinent approach, transiting towards a pull mechanism.

In today's world, you could adopt a minimalistic approach requiring almost no budget, or you could choose a more sophisticated and expensive strategy. Your media strategy depends entirely on your business's scale, budget, audience, and objectives.

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PESO model from Spinsucks (credentials: https://spinsucks.com/communication/peso-model-breakdown/)

To comprehend this vast landscape, we employ the PESO model. As a business, you already possess some media assets—your website, an email database of your clients or visitors, business cards collected during events, and more. This is your Owned Media. You don't need to shell out extra money to publish content on these channels. This is an excellent start for any business, particularly startups or SMEs.

The second type is Earned Media. Earned media refers to publicity or media relations. It's when you secure a mention in a newspaper or a trade publication, or you make an appearance on a news show to discuss your product. This has been the traditional domain of PR.

Shared Media, also known as social media, is the next facet. It has evolved beyond just marketing or customer service, becoming a primary means of communication both internally and externally for many businesses.

Finally, we have Paid Media. These are channels that you pay for to distribute your content. It could be mass media like TV, billboards, newspapers (also known as above the line), or direct marketing media like mailing lists (referred to as below the line media). Social media platforms such as Facebook also offer paid advertising options.

Your media strategy should be in alignment with your customers, your purpose, and the touchpoints of your journey. An imbalance in your efforts across these four media types, or a lack of alignment of your media strategy with your customers and goals, can compromise the effectiveness of your campaign.

Tools for Media

In the constantly evolving digital era, having the right set of tools is key to managing and optimizing your media presence. Here, we delve into some of the tools essential for each type of media.

For Owned Media, a CMS (Content Management System) like WordPress or Squarespace is necessary to manage your website. Email marketing software such as MailChimp or Constant Contact can assist with email campaigns.

For Earned Media, consider tools like HARO (Help a Reporter Out) to connect with journalists looking for expert quotes or BuzzSumo to analyze which content performs best.

For Shared Media, social media management tools like Hootsuite or Buffer can help manage and schedule posts. Social listening tools such as Sprout Social or Brandwatch can monitor mentions of your brand across various platforms.

For Paid Media, platforms like Google Ads or Facebook Business Manager can help with ad creation and tracking. Tools like SEMrush or SpyFu can provide insights into your competitors' ad strategies.

Each of these tools helps manage different aspects of your media strategy, making your campaigns more effective and efficient.

Translating Media into Action

The effective usage of the media mix is not an end in itself. It's about converting that usage into concrete actions – which ultimately results in achieving your organizational goals.

Firstly, Owned Media, if used effectively, can create a strong brand identity and serve as a reliable information source about your products or services. An action point here is to optimize your website and other owned media to convert visitors into leads or sales.

For Earned Media, the goal is often to build credibility. Positive press mentions can be leveraged to foster trust among your audience. The resultant action would be to convert this trust into customer loyalty and advocacy.

In Shared Media, the action can be twofold. Firstly, it can serve to foster a community around your brand, driving engagement through shares, likes, and comments. Secondly, it can be used to provide customer service, addressing concerns and queries in real-time.

Lastly, Paid Media can drive a variety of actions, from awareness to conversions. The key here is to design the creative and copy in a way that resonates with your target audience and prompts them to take the desired action.

Statements for self-assessment

Is the current Media strategy helping you achieve your goals?

To understand whether your Media strategy is helping you achieve your goals, comprehensive evaluation is critical. Rate your agreement with the following statements on a scale from -3 (completely disagree) to +3 (completely agree):

1. Your owned media are solid, consistent with your goals and serve as the foundation for your media strategy.

2. Your earned media strategy helps you to secure authority and credibility of your business to your audience.

3. You have created engagement and community for your customers through your shared media strategy.

4. You have amplified your targeting for achieving your goals through paid off-line and on-line media.

5. Your media strategy is compatible with the concept of sustainability

This scoring system will help you identify areas where your strategy is strong, as well as areas for improvement. For instance, a low score in the earned media strategy may indicate a need for stronger PR efforts.

Remember, media strategy is a dynamic process that requires constant refinement. Regularly evaluating your strategy and making necessary improvements can lead to better alignment with your business objectives, ultimately improving your return on investment.

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Marketing Canvas Method - Conversation - Media Strategy

Interpretation of the scores

• Negative scores (-1 to -3): These scores suggest significant gaps in your media strategy. Your owned media may lack consistency, your earned media efforts may fail to build credibility, and your shared or paid media may not engage customers effectively or align with sustainability.

• A score of zero (0): A neutral score indicates partial effectiveness. While some media aspects may work, others are underdeveloped, limiting the overall impact of your strategy.

• Positive scores (+1 to +3): Positive scores suggest a well-rounded and effective media strategy. Your owned, earned, shared, and paid media are aligned with your goals and sustainability principles, creating a cohesive and impactful presence.

Case study: Green Clean’s Media strategy

• Misaligned Understanding (-3, -2, -1): Green Clean’s owned media (e.g., website) lacks regular updates and optimization. Earned media efforts are sporadic, and shared media fails to engage customers meaningfully. Paid campaigns are generic and do not target specific audience segments effectively.

• Surface Understanding (0): Green Clean has a functional website and earns occasional media coverage but lacks a cohesive strategy. Shared media posts generate limited engagement, and paid campaigns are not optimized for ROI or sustainability.

• Deep Understanding (+1, +2, +3): Green Clean uses a regularly updated, sustainability-focused website as the cornerstone of its strategy. Earned media features testimonials from eco-conscious influencers, while shared media fosters a community through engaging posts about reducing waste. Paid campaigns use targeted ads promoting green initiatives, all while minimizing environmental impact.

Conclusion

The Media sub-dimension ensures that your marketing efforts are strategically aligned across owned, earned, shared, and paid channels. By focusing on integration, engagement, and sustainability, you can amplify your brand's reach, credibility, and impact, fostering stronger connections with your audience and supporting your business goals.

Sources

1. PESO Marketing Model, https://iterativemarketing.net/peso-model-marketing/

2. Spinsucks.com, https://spinsucks.com/communication/peso-model-breakdown/

More on the Marketing Canvas

Marketing Canvas - Content and Stories

Last update: 15/6/2023

In a nutshell

The Content & Stories sub-dimension in the Marketing Canvas emphasizes the importance of crafting compelling narratives that reflect your organization’s goals, resonate with your audience, and inspire action. Effective content and stories are built on a deep understanding of how users think and speak about a subject, leveraging appropriate mediums to maximize impact. Furthermore, these stories should be truthful, align with sustainability principles, and contribute to building trust with your audience.

For example, Green Clean might tell stories of families creating healthier homes by choosing eco-friendly products, illustrating both the emotional and practical benefits of sustainability.

Introduction

The Content & Stories sub-dimension within the Conversation category focuses on how organizations communicate with their audience. Stories and content are powerful tools for sharing your brand’s purpose, values, and solutions. To be impactful, they must address user needs, convey clear messages, and inspire desired actions while remaining authentic and aligned with sustainability.

Content and storytelling are not just about information—they are about connection, inspiring loyalty, and reinforcing your brand's relevance.

What are Content & Stories?

Content and stories are integral components of a successful marketing strategy. They represent how your brand communicates value, connects with its audience, and inspires action. Content marketing takes a strategic approach to creating and distributing valuable, relevant, and consistent content to attract and engage a clearly defined audience. Its ultimate goal? To drive profitable customer actions.

"Content marketing is a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly defined audience — and, ultimately, to drive profitable customer action."

The true power of content and stories lies in their ability to act as catalysts within your Marketing Strategy. Reflecting on the concept of inbound marketing, the idea of engaging with suspects, prospects, or customers through an ongoing, positive dialogue immediately resonated with me. By designing thoughtful inbound funnels, we can craft compelling stories and create meaningful content that adds value and aligns with customer needs.

Creating impactful content requires more than just originality. Beyond producing your own content, alternative approaches include:

• Curating: Sharing content from trusted sources that align with your brand values.

• Co-creating: Collaborating with others to produce content that reflects your shared vision.

A quote from the CMO of General Electric encapsulates the essence of effective content:

"Content that tries to sell, doesn’t! Content that tries to help, does!"

Your content should resonate with your Purpose, align with your customers' Job-to-Be-Done and Aspirations, and consistently reflect your Value Proposition. Most importantly, it must integrate seamlessly into your funnels and customer Journey.

Marketing Canvas by Laurent Bouty - Stories

The role of storytelling

Storytelling elevates content by weaving narratives that captivate and resonate with your audience. It’s an age-old art that combines facts with engaging delivery to communicate a message effectively. Stories can be grounded in reality or creatively enhanced to emphasize core messages.

What makes a good story? According to HubSpot, great stories share these qualities:

• Entertaining: They capture and hold attention.

• Educational: They provide value and new insights.

• Universal: They appeal to diverse audiences.

• Well-Organized: They follow a clear, logical structure.

• Memorable: They leave a lasting impression.

A strong story keeps readers engaged, ignites curiosity, and establishes an emotional connection. For example, Green Clean could share a customer’s journey toward sustainable living, highlighting how their products played a transformative role.

Aligning Content and Stories with strategy

For content and storytelling to be effective, they must align with your audience’s needs and aspirations. A fragmented or irrelevant strategy will fail to resonate and drive action. When aligned, content and stories:

• Reflect your brand’s Purpose and connect to your audience’s identity.

• Address the Journey by mapping to critical moments.

• Reinforce your Value Proposition with relevance and authenticity.

The power of stories and content lies in their ability to make your brand unforgettable, fostering loyalty and driving sustainable growth.

Content & Stories: an in-depth perspective

To create effective content and stories, businesses must:

1. Align goals with needs: Ensure that storytelling serves both organizational objectives and user expectations, striking a balance between informing and inspiring.

2. Adopt a user-centric approach: Understand how your audience thinks and communicates to ensure your stories resonate authentically.

3. Include clear CTAs: Guide users toward meaningful actions that align with your goals, such as making a purchase or signing up for a newsletter.

4. Optimize medium selection: Choose the right channel or format to maximize the story’s impact, considering both the audience and resource constraints.

5. Communicate sustainability: Use truthful, engaging content to share your sustainability efforts without exaggeration or greenwashing.

For example:

• User-centric: Green Clean’s content addresses common questions about eco-friendly cleaning, reflecting customer concerns and language.

• Sustainability focus: The brand publishes blog articles about reducing plastic waste through refillable packaging.

Translating Content & Stories into action

Content and stories should seamlessly connect organizational goals with customer expectations. To achieve this:

• Plan strategically: Ensure all content aligns with both business objectives and audience aspirations.

• Engage authentically: Use user-friendly language and relatable narratives.

• Inspire action: Include clear, actionable CTAs to guide customers effectively.

• Leverage the right channels: Adapt your content to the medium that maximizes impact.

• Maintain transparency: Build trust through truthful storytelling, especially around sustainability.

Questions to consider:

• Do your content and stories reflect both your organization’s goals and your users’ needs?

• Are your content and stories structured based on how your audience thinks and speaks?

• Do your stories include clear and actionable CTAs?

• Have you chosen the right medium for your content, balancing impact with resource constraints?

• Are your stories truthful and aligned with sustainability principles?

Statements for self-assessment

For a comprehensive evaluation of your understanding and application of the Content & Stories concept, rate your agreement with the following statements on a scale from -3 (completely disagree) to +3 (completely agree):

1. Your content and stories goals are reflecting your organisation's goals and user's needs.

2. Your content and stories are created and structured based on your understanding of how users think and speak about a subject.

3. Your content and stories have clear calls to action. You know exactly what you want your users to do after reading.

4. You have chosen your content and stories medium adequately in function of your type of story as well as resources, like time and money.

5. Your content and stories are truthful and communicate about sustainability.

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Marketing Canvas Method - Conversation - Content and Stories by Laurent Bouty

Interpretation of the scores

• Negative scores (-1 to -3): Negative scores indicate that your content and stories are disconnected from your goals, fail to meet user needs, or lack clarity and credibility. These issues can lead to disengagement, confusion, and mistrust. Immediate action is needed to realign your storytelling with audience expectations and organizational values.

• A score of zero (0): A neutral score reflects partial alignment of your content and storytelling efforts with user needs and organizational goals. While some aspects may be effective, gaps remain in structure, messaging, or authenticity. Additional effort is required to refine your approach and ensure consistent impact.

• Positive scores (+1 to +3): Positive scores suggest that your content and stories are well-aligned with organizational goals, user needs, and sustainability principles. They are structured effectively, include clear CTAs, and leverage the right mediums to maximize engagement and impact.

Case study: Green Clean’s Content & Stories

• Misaligned understanding (-3, -2, -1): Green Clean’s content is generic and fails to connect with its audience. The brand uses overly technical language that alienates users and lacks clear CTAs, making it unclear what actions customers should take after engaging with the content.

• Surface understanding (0): Green Clean’s content addresses some user needs but lacks consistency and focus. For example, while blog articles discuss sustainability, the storytelling is not user-centric, and calls to action are vague or absent, limiting engagement.

• Deep understanding (+1, +2, +3): Green Clean creates compelling content that reflects user concerns about sustainability and provides actionable insights. Stories about families using eco-friendly cleaning solutions are shared through engaging videos on social media, with clear CTAs to subscribe to the brand’s services. The content is authentic, transparent, and highlights the brand’s commitment to sustainability.

Conclusion

The Content & Stories sub-dimension is vital for crafting narratives that connect with your audience, inspire action, and reinforce your brand’s values. By aligning storytelling with organizational goals, user needs, and sustainability principles, businesses can create impactful content that fosters trust, loyalty, and engagement.

Sources

1. Download first chapter of ebook on content here

2. Download ebook on content: https://qualifio.com/blog/en/content-marketing-professional-practical-guide/

3. Ultimate guide of storytelling (Hubspot), https://blog.hubspot.com/marketing/storytelling

More on the Marketing Canvas

Originally published August 2019, updated December 2020

Marketing Canvas, some tips about the process

Canvas works really well if:

1. Start with a clear ambition, S.M.A.R.T. and linked with the finance. One of the usual mistake when doing a marketing strategy exercise is to not properly link the marketing actions with the financial consequences. In the Marketing Canvas exercise, we genuinely start from the financial ambition for addressing this issue. This ambition is about growth and thus the canvas is about growth hacking your marketing strategy.
2. Start with a clear persona representing a customer cluster sharing the same Job To Be Done (problem to be solved by your offer). It could happen that you can't achieve your ambition with your current persona/segment (in classical strategy, it corresponds to a cash cow or a future dog). If it is the case you should consider another segment with another job to be done.
3. Assess the current situation of your marketing mix by asking the 28 questions as defined in the canvas. Define clearly if each dimension TODAY is helping you to achieve your ambition (it is an accelerator) or is not (then we define this dimension as a brake). Do this exercise in team as it will create a shared understanding of the situation and support your answers with facts. 
4. Backward thinking is a very powerful way of finding solutions to any problem. In this process, try to visualise/imagine how dimension(s) defined as BRAKES would look like if they would help you with your ambition. What is different? Could you describe it? Does it really help with your ambition? If yes, then you have one idea of potential solutions. Find as many ideas as possible.
5. Having generated plenty of ideas (some could even be yellow ideas aka impossible ideas), you should prioritise it in order to finalise your preferred vision of this future where your ambition is achieved. What are the actions you should do to transform this future into a reality: Start Doing, Stop Doing, Do More, Do Less, Simplify, Magnify? Brainstorm as a team and list all actions.

6. You now have identified all actions for building your future but you have to organise it into a comprehensive and feasible roadmap. Some actions are low hanging fruits while others require more time and effort. One way to do this is to use these 2 criteria: contribution to the ambition and effort. Congratulations, you now have a roadmap and a marketing strategy.

Marketers, You Should Unlock The Next Decade

Marketers, You should unlock the next decade

As CMOs gain more power in the boardroom — and over technology spend — it will be critical that they understand the factors that drive success. As Jerret West, vice president of Marketing at Netflix, said, “We have to look for ways to combine creativity and technology with an understanding of how the business fits into the overarching customer experience. We have to think and act like CEOs.”

This describes the new world of marketing we live in today. And in this new world, new rules apply. CMOs who get on board will find amazing growth potential. Those that keep repeating strategies from yesterday’s playbooks are bound to fall by the wayside. To avoid going down that path, here are five keys to get started...

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