Information is the new currency, so they say.
Living in a world highly influenced by new technology, it’s not surprising how businesses capitalize on information to boost their growth while navigating the tumultuous waters towards their success.
This is why results-based marketing has become more attractive to brands looking into implementing more insightful ways of boosting their businesses without harming their business’ financial health.
So, if you’re looking to know more about a very accurate way to grow your business, here’s a compact guide to performance-based marketing.
What Is Performance-Based Marketing
As the name suggests, performance-based marketing is a “results-based” marketing strategy.
These results are measurable actions such as page clicks, ad views, ad clicks, sales, social media engagement, app installs, and the like.
Compared to implementing traditional digital marketing tactics, brands that implement performance-based marketing only pay their preferred outsourced full-service digital media service provider when they get the results rather than paying marketing service providers monthly or annually.
Advantages Of Performance-Based Marketing
This method opens doors of opportunities to increase a brand’s reach and audience value at a lower cost so that small businesses may benefit significantly from this marketing strategy.
To be more specific with what advantages performance-based marketing can bring to a company, here’re some reasons why you may want to use it on your brand:
Simplified measurement
The simplicity of measuring data is one of the best things about results-driven marketing.
This marketing strategy helps business owners or marketing experts make agile business decisions based on real-time, tangible results from a quick glance at their monitoring dashboard or spreadsheet.
Offers better insights
Implementing this strategy means getting better insights into the progress of a business’ marketing strategy.
A quick check of the key metrics immediately shows which ads have the highest return of investment (ROI), which video brings in more mortgage leads, and which blog post has the best engagement rate on Instagram.
The exact part of your funnel where your target is audience drops off.
For example, the Funnel Authority team found that by using performance-based marketing, they were able to identify the specific part of their funnel where their audience dropped off and make necessary changes to improve their overall conversion rate. Also, by analyzing the data from a performance-based marketing campaign, businesses can identify their audience’s behavior and tailor their content specifically to them to drive more conversions.
Lower risks
Businesses, especially smaller brands, who’re trying to look for ways to boost the growth of their digital presence can benefit from results-based marketing strategies to lessen their financial risks.
Compared to other marketing models, real-time adjustments to tweak certain elements or end a campaign means lowering the risk of financial drain instead of losing money from marketing campaigns that are about to crash and burn.
Increased transparency
Implementing a performance-based marketing strategy needs transparency from both the business owners and their marketing managers or agencies through:
- Setting business goals and expectations early on
- Knowing the exact terms and conditions to be met before payment is given
Considerations For Implementing This Strategy
You need to remember that many factors can influence the success of marketing campaigns. So, before you start implementing this digital marketing strategy, it’s best to review some factors you should consider like:
Established digital presence
For results-based marketing to work for your business, you must already have a solid digital presence, be it on Tiktok, Facebook or Twitter.
Performance-based marketing depends on your target market taking specific actions.
And, if your brand is relatively new, you may want to focus more on brand awareness first.
If you implement this results-based strategy, having no brand recall will not get you to your desired business goals.
Marketing budget
As always, before implementing a strategy, the financial health of your brand should be part of the first things you consider.
Simple doesn’t mean risk-free, and it’s always best to consult with marketing experts first to make sure your business needs will be given the appropriate strategy.
For relatively new businesses, it may make more sense to capitalize on free marketing techniques first to protect the financial health of your brand.
The need for quick, direct results
Performance-based marketing may bring immediate results, but this shouldn’t distract you from your brand’s long-term goals.
As with everything, make sure each tactic creates a compounding effect to boost your brand.
Thorough understanding of technicalities
Simple doesn’t mean it’s easy.
To appreciate this strategy and implement it successfully without using black hat methods such as pay-per-click fraud, you must already have the marketing skills needed to implement a results-based marketing strategy.
This strategy can be harmful to your business if you force someone without the knowledge and skills to implement this tactic; hence, consulting marketing experts is always a good idea.
Enjoying The Fruits Of Your Efforts
Suppose you’ve made a thorough and objective evaluation of your business needs and found that performance-based marketing is appropriate for you.
In that case, it’s essential to set clear goals, choose a trusted marketing agency, and also to monitor your results to avoid any fraudulent practices that may be going on under your nose.
Performance-based marketing may not be for everyone, but if you decide that it’s right for your brand, don’t forget to do your due diligence.