Nearly 73% of global business leaders plan to increase their email marketing budgets and over 44% are increasing their search marketing budgets this year, according to a survey by StrongMail in December of 2008. These are impressive numbers and surely small businesses have good reason to increase these budgets. Nevertheless, let me throw out a word of caution before you dump a ton of money into these marketing tactics.

No doubt, email marketing is probably the least expensive way to get in front of prospects. Business owners need to realize that response rates aren’t much different from traditional advertising methods. With all of your competition also increasing their email marketing spend too, your prospects will drown in email overload.

I’m not advocating that you should ignore this medium. I’m just saying that your message had better stand out, you must provide value, and most importantly, you better have a way to convert a much higher percentage of those subscribers into sales.

The industry sees a ton of people unloading their marketing budgets on the Web because it’s relatively inexpensive and it can be very effective. But all this marketing budget does is generate TRAFFIC, NOT sales. If you’re going to invest in email marketing, search marketing, social marketing or other forms of marketing, you ought to also invest in optimizing your website to capture the traffic that’s generated, and most importantly, invest in a systematic way to follow up with every single one of those leads.

Generally, over 90% of any marketing budget is completely wasted because only 10% or less of all new leads actually purchase. To convert a higher percentage of leads, you will need to follow up with every lead systematically and provide value in every message.

Here’s the proof:

• A study by the Sales & Marketing Club of Los Angeles proved that 81% of sales close after the 5th call.
• Jim Cecil, an expert in nurture marketing, estimates that 60% of all leads will buy if followed up on properly.
• According to a research report by BPM Forum, over 80% of generated leads are never followed up on, or are dropped or mishandled.
• According to Marketing For Success – 80% of potential sales are lost due to lack of follow-up.

We see it every day with Infusionsoft customers.  Those who follow up appropriately and consistently are easily doubling their sales repeatedly. (And now, we guarantee it.)

As you allocate your marketing budget this year, make sure you’re spending it on the right things – those things that actually double your sales. Don’t burn it.

[Image credit: acordova on Flickr]

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