I live close to a golf course, so my garage is always full of golf balls collected by my children. We literally have big plastic containers filled with golf balls sorted by type and condition. While I like to keep a container with the best of them in my trunk to restock my endless need, my children have other ideas.

Mitchell and Madeline, who seems to have the same entrepreneurial spirit I have, would rather sell these balls back to the golfers as they drive by our house on their way home.

The reality is, turning a profit on free golf balls might prove less profitable than they hope. Attracting people to a curbside store will require a communication strategy. They’ll need to buy a sign to put in the yard, and since not everyone lives on our street, they may have to place an ad in the country club newsletter to get the other neighbors to drive by our house, let people know when they will be in the yard, and why it’s worth driving out of their way for some used golf balls.

If they aren’t careful, Mitchell and Madeline might end up spending more money to advertise the golf balls than the value of their time spent acquiring them in the first place.

A lot of small business owners make the same mistake. In order to be profitable, marketing communications have to make more money than they cost. In this article, I’ll explain how to efficiently use email marketing to make sure that the money you spend on all your marketing efforts generates enough money for your business.

Identifying All Customer Touch Points

Understanding customer behavior helps you determine what investments you need to make in order to be successful. Figuring out where your customers come from helps you determine where to invest your money and where to cut unprofitable spending.

What’s important to remember is there are multiple touch points through which customers can connect with your. When trying to determine which touch points are most effective, there are two key questions to ask:

• How did you find us?
• What brought you into the store today?

Let’s consider the following example:

Sally, a small business owner with a brick-and-mortar jewelry store, is contemplating stopping sending emails because most of her new customers were coming from the online ads she places on Google when people search for “jewelry store in Omaha, NE.”

When Sally asks her new customers how they found out about her (the first question), they say they searched online and found her website. But the second question would yield even more information that shows that her new customers actually come from her emails and several other touch points.

For example, she asks people to join her email list at the networking events she attends each week. These prospective customers are receiving her emails, but they aren’t always ready to buy jewelry immediately when the emails go out.

But when Sally’s customers are ready to buy, they recall the networking event, the emails, and the town her store is in, but they don’t remember the name of her store or exactly where it’s located. So, they search for “jewelry store in Omaha, NE” to find out where the store is and when she is open.

Then they drive to Sally’s store, which happens to be across the street from another jewelry store. Since the sign over her store looks the same as the logo on her website, her customers are able to easily track her down. If Sally were to ask them how they found her she is just as likely to hear from a web search, yellow pages, or the sign on the door as she is to hear the real source — her networking efforts. This simple example highlights the challenges in figuring out which of your marketing efforts drive the greatest return for your business. That said, the more you know about your sources the more effective you can be in maximizing your spend. It’s important to remember that it usually takes multiple touches to get customers to make a purchase.

This simple example highlights the challenges in figuring out which of your marketing efforts drive the greatest return for your business. That said, the more you know about your sources of business, the more effective you can be in maximizing your spend.

Understand your marketing mix

The combination of your marketing media is known as the marketing mix, and it’s important to understand the role each touch point plays in driving you business.

When I work with business owners on maximizing their email marketing spend, I often start by assessing their overall marketing strategy. I start here because email marketing is a critical component of a comprehensive marketing strategy and it needs to be interwoven with every other marketing program being deployed. I typically start the marketing strategy discussion with a conversation on the market opportunity, during which I ask three questions:

1)   Define your target market. What are the characteristics of your best, most likely customers (age, gender, location, interests, business types, etc.)?

2) How do they congregate (where, with whom, when, etc.)?

3) How do you plan to reach them (directly, indirectly, word-of-mouth, etc.)?

This is followed by a discussion of where the business owners believe their revenue will come from over the next 24 months. I ask them to answer this question by allocating a percentage of the total future revenue into one of three buckets:

1) The Unaware: people or businesses that have no idea who you are today.

2) The Aware: people or businesses that no of you today but are not a customer.

3) The Active: people or businesses that have already purchased from you.

Simply put, the ultimate goal of your marketing strategy is to make the unaware aware, drive the aware to become active, and get the active to return on a regular basis. To maximize your marketing mix, you simply need to determine the most cost effective way to move people from one stage to the next and then determine how much of your budgeted time and dollars you want to allocate to each step.

Within a well-defined marketing strategy, the role email marketing plays is interdependent and aligned with other marketing efforts when it comes to acquiring customers and nurturing the relationship.

A well designed email marketing strategy acts as grease that speeds up the customer relationship cycle. It’s interesting to note that businesses typically equate marketing to focusing solely on moving the aware to action (Acquisition Marketing). A well structured email marketing strategy typically starts with getting repeat business from those that have already purchased from you (Action Marketing) but then, naturally migrates back around to enhance Acquisition Marketing efforts and ultimately drive Awareness.

Now it’s time to take out a piece of paper and write down your marketing strategy. Be sure to list every place you interact with your customers and prospective customers. This is something you will want to update regularly and it will give you a great starting point for determining how to incorporate email marketing into your overall mix.

In my next article, I’ll discuss how to reap the soft benefits of email marketing.

About The Guest Author: Eric Groves is the senior vice president of Global Market Development at Constant Contact and the author of The Constant Contact Guide to Email Marketing, from which this article was adapted.