Marketing Automation, Budgets and Attitudes – Rob Thomas Interview

Marketing Automation Estonia

Rob Thomas Interviewed by Estonian Media

In early 2016 Rob Thomas traveled to Tallinn, Estonia to give a talk and take part in a book-signing. Whilst there he gave interviews to various publications and broadcasters; this article is a translation of the interview given to Kadri Hansalu which was first published on the 1st April.

It has long been said that Estonians make poor salespeople. It’s now increasingly common to hear that sentiment as we struggle with the evolving marketplace, we’re finding our marketing budgets are too small and that there is a lack of specialist skills. Recently Tallinn was visited by some Digital Marketing experts familiar with the nuances and quirks of the digital world.

Rob Thomas is one of the co-authors of the best-selling book ‘Digital Minds: 12 Things Every Business Needs to Know About Digital Marketing.’ Rob Thomas has been at the helm of his Digital Marketing Agency for over a decade, alongside running his own agency he is an International Keynote Speaker and Regional Director for Wales and The West UK for WSI. The changes in Marketing that have occurred over the last decade have happened at an incredible pace and that pace doesn’t look set to slow any time soon.

Our task is to be constantly informed of all these changes as they happen. If Google makes a change we need to know what that change is, what it means for the client and what we need to do about it. And we have to make all of this clear and easy to understand for the client.”

Digital Minds Marketing Automation Rob Thomas

Estonia is a technologically innovative nation, we’ve embraced start-up culture and the cyber-economy. By all accounts we are well placed to be at the cutting edge of Digital Marketing.

What does the Digital Era mean for the average business? Are Marketing costs going up or coming down? With new marketing channels and technology appearing so rapidly can a small business keep up?

The ability of small and medium-sized businesses to market themselves has changed drastically in the last 10-20 years. 15 years ago it was only large businesses that could effectively market themselves across nations and borders.

One of the most disruptive changes that has occurred while I have been working is the rise of Marketing Automation. I worked in Financial Institutions during the 80’s and the 90’s. During this time I noticed these institutions were spending millions of pounds just to try and get to know their own customers. The vast majority of money, time and technology went into trying to automate processes that dealt with existing customers, almost none of it was pointed outwards with the intent of finding or communicating with new clients.

Over the past ten years this attitude and focus has completely changed, however Marketing Automation has seen an uptake rate of less than 10%.

Why the slow uptake?

Marketing Automation has been very expensive until very recently. We’re talking £500-£1000 a month just for the software license, if you wanted to import 10,000 potential leads you could be looking at £20,000+ in management fees.

A large portion of the Estonian budget is generally spent on new technologies but the uptake of Digital Marketing has been irregular and frenetic.

Why is this so?

I’m not sure I have an answer! I can only assume that the market must be this way in other places as well. Finding options for the implementation of Digital Marketing within Estonia and then extending outside of Estonia should be pursued intensively.

Of the businesses already using Marketing Automation many have spent a lot of money on their campaigns but little on measurement. Some businesses are spending 95% of their budget on their campaigns, attempting to create the perfect campaign through brute force. With only 5% of the budget spent on measurement how can they even know if they are having success? If 20% of the budget is spent on measurement and analysis then the effectiveness of the remaining 80% is doubled. The more you measure and analyse the better your ROI (Return On Investment.)

Estonia has a unique opportunity here. In the same way Estonians raced ahead of the rest of Europe to master Start-Up culture and new technology we can also lead the way with Digital Marketing. If you’re thinking Estonia doesn’t spend enough on Marketing then you should know the rest of the world is in the same boat. A large portion of Marketing budgets worldwide go to waste every year. Put the money in what you think is the right place, measure the results, analyse the results and put it where those results indicate it would bring the greatest returns. It is not necessary to spend more money and in many cases it is not desirable! Putting the same amount of money or even less in the right places, with greater efficiency can achieve results simply increasing a budget blindly could never achieve.

How can I evaluate what the Company Marketing Budget should be?

The average business wishing to grow should be thinking of spending around 11% of annual turnover on Marketing, this is a very general figure. A 20 year old business with a solid client base might only need to spend 2-3% of their turnover. In contrast a Start-Up business should be spending 25-50% of their first year turnover on Marketing activities.

All these figures change if your business is launching a new product, expanding offices or moving into a new business area. When undertaking these activities you need to think as if you are in the ‘Start-Up Phase’ again, there is a need to spend more money and time on your Marketing.

When businesses are so reluctant to spend on Marketing even in the Start-Up phase can we expect people to listen to this advice?

Even when Start-Ups are investing a lot of money in Digital technology or slick Social Media without ‘real sales’ few want to spend money outside of what they perceive as valuable. Nowadays it’s possible to track everything, radio ads, TV ads, billboards, you can measure the performance of all of these. The big agencies don’t want to though, if they measure and their multi-million pound TV ad series isn’t performing what will they do? If no-one is measuring properly they don’t have to worry about that!

Many of the larger businesses who have roots in Estonia think they cannot hire Marketing professionals from Estonia. They feel they have to get someone from the UK or USA to have a ‘modern Marketer.’

Do you think that’s a fair opinion?

No, not at all. In London there are very large, very well known Marketing Agencies. Many of them are still stuck in the old-fashioned advertising world, thinking of Marketing no differently than they did in 1999. They will spend hundreds of thousands of pounds on a photo-shoot and not know how to measure the end result’s success. It was a real shock to me, how much money they are willing to spend on certain things and yet view Digital Marketing as a ‘waste’ when it incurs only a fraction of the cost.

Whatever the response of those ‘old-school’ executives we know that in fact measuring spend, success and efficiency is the most important part of any Marketing campaign.

Do the skills required to do this exist in Estonia?

Yes! Of course they do! When it is necessary to call in and cooperate with international agencies we welcome them but the strategy should be to be lead by people who are familiar with the market, culture and area. There is no reason we cannot cultivate our own skills, we’ve proven we can do it before and in similar circumstances.

In 2016 is there any business size or area that doesn’t need Digital Marketing?

Many small and medium sized businesses think they can take the revenue from the sale without first spending some of that on the Marketing. For the last few years we have considered the relationship between a business and their customer in terms of something called Social Selling. It means being visible on Social Media so that when the customer has a problem they hardly even have to seek you out, they naturally come to you seeking the solution. This doesn’t just happen by accident and unfortunately it’s not as simple as just having a Facebook and Twitter account for your business. Strategy and consistency are key to the success of any Social Selling effort. A blogger that publishes irregularly with wildly varying quality levels and topic areas will not meet with much success.

Consistency will bring you good results?

In many ways this doesn’t apply only directly to Digital Marketing but also your wider activities on the Web. Your Online Presence is what the majority of people will first come across when seeking out you, your business or your solutions. If a person reads your biography on your website or LinkedIn they will naturally be skeptical, it’s an advertisement after all, one you’ve written for you! But if they go to a third-party website and see similar things said it is another matter. The opinions and reviews of customers, clients and colleagues are of great importance to acquire but you cannot simply ask them what they think and write it on your website. Having positive opinions of you in the right place will often be the factor that causes a potential customer to get in contact.

This has always been the case though hasn’t it? How has the Digital World changed word-of-mouth?

The Digital World has totally changed people’s habits and how they go about doing things. 20 years ago I built myself a house, I hired a builder for whom I’d received positive recommendations. Despite this he turned out to be a fraud, the incomplete work, faults and stolen materials ended up costing me £50,000. He managed to avoid his reputation catching up with him for a long time and might still might be able to if it weren’t for the internet. A single search of his name and I’m sure no-one would hire him now!

On eBay if someone doesn’t have 99%+ feedback and at least 50 sales then you’re taking a risk buying from them and you know it. If a hotel hasn’t got at least 4.5/5 on TripAdvisor then you’re not going to stay there unless you have no other option. On the Internet there is nowhere to hide, if you’re a good business then you should maximise the impact of your positive feedback. If you’re a bad business then you should change because it’s only a matter of time before that negative feedback puts off enough customers that you can’t make any money. Bad feedback can happen to good companies. Some good companies have never bothered to build up their good reputation. These businesses suffer because they didn’t realise how powerful Online Reputation is. You don’t want to be one of those stories, especially because it’s easily avoided by simply being pro-active from this point forward.

It’s important customers see that you have a good reputation, if you have a big, positive online presence do you still have to spend time talking to customers and clients?

I remember when I was working in the bank 20 years ago and a colleague said ‘We don’t give the customers our email addresses, if we do they’ll start annoying us with emails whenever they want!’ These days no matter where you are in business it’s almost impossible to avoid communicating with your clients. If you want to avoid your clients you have to ask yourself what you’re doing in the first place?! From the smallest one-man-band to multi-national corporations, they all have to interact with customers on their level on Social Media every day. Some customers are polite and friendly, some inappropriate and some will be incredibly rude and insulting. On Social Media you have to take the good with the bad. This is why it’s important to have a Social Media Policy alongside your Social Media Strategy and to always remember that once you press send whatever you’ve written can’t be taken back.

Digital Minds: 12 Things Every Business Needs to Know About Digital Marketing