How to use the 40/40/20 Marketing Rule To Maximize Your ROI

In today’s article, we’ll discuss how you can use the 40/40/20 marketing rule to achieve the maximum return on your investment with your marketing budget.

For every entrepreneur anywhere on the globe, marketing is vital to making your business successful. 

If you can master the art of marketing, your business will never struggle to find customers who are open to buying your services and products.

A great man once taught me that the very essence of entrepreneurship is marketing.

Given how important marketing is, it’s vital for you as a business owner to understand the best way to allocate your marketing budget, resources and time in the right proportions to make your marketing campaigns successful.

So today, we give you the keys to unlocking successful marketing campaigns using the 40/40/20 marketing rule in your business!

Content Overview:

What is the 40/40/20 marketing rule?

Why is the 40/40/20 marketing rule important for maximizing ROI?

Delivering the Message

Testing and Refining

Conclusion and Summary of the 40/40/20 marketing rule

What is the 40/40/20 marketing rule?

The 40/40/20 marketing rule is a guideline to help you allocate your marketing budget in the right proportions to get you the maximum ‘bang for your buck’.

If you spend your budget by following the 40/40/20 rule, you will end up with a campaign set to deliver the results you require.

The rules are:

• Spend 40% of your budget on creating a compelling message
• Allocate 40% on delivering that message through the proper channels
• Use 20% on testing and refining your message and delivery methods

So now you know the rules of engagement.

Next question…

Why is the 40/40/20 Marketing Rule important for maximizing ROI?

So, as we have just uncovered, there are three separate components in marketing where you need to spend your budget.

• Crafting compelling messages (using a Copywriter)
• Delivering your messages (paying for ads) on the most relevant channels
• Testing and refining your messages

Spending your marketing budget using the 40/40/20 marketing rule means you won’t overload money in one particular area of your marketing strategy at the expense of not spending enough on another element.

For example, and for ease of maths, let’s say you had a marketing budget of £10,000 (this figure is just an example, you would apply the same technique if you were spending £1,000 or £100,000 or £1m).

If you spent £500 of that budget on finding and paying a Copywriter to write an ad for you, then spent £9,500 with Google to show your ads, you wouldn’t get an excellent result for the £10,000 you put in.

If you spend £10,000 on advertising, it would be imperative and beneficial to put more effort into the front end (crafting a compelling message) and have a more complete, well-rounded marketing strategy.

So let’s redo the above example…

Your business has a marketing budget of £10,000, but this time, instead of only spending £500, you spend £4,000 with your Copywriters and get a complete, varied set of advertising copy.

The difference now is that by spending £4,000, your Copywriter will produce multiple adverts and marketing materials designed to market specifically to different sub-sets of your overall target audience.

As an example…

Let’s say you were looking to sell life insurance.  

Everyone needs life insurance, but everyone’s reasons for having it will differ depending on their demographics. So you would need advertising copy to appeal to different audience types.

Let’s break this down…

Ad type one:

Ad type one and its accompanying materials will target prospects who meet the criteria of being a married couple aged between 30 – 35, with children and a mortgage. The ads would highlight that if something happened to one of the couples, there would now only be one salary left to pay for everything, and there would be a danger of not having enough money to pay the mortgage. Your ads would then show the benefit of having life insurance to pay off the mortgage in this situation and remove the danger of losing the house for the remaining spouse and two children.

Ad type two:

So staying with life insurance… 

Ad type two would target an audience aged 55 – 65 who are concerned that when they pass, their loved ones will face a hefty inheritance tax bill that they couldn’t afford to pay, and they’ll be unable to receive their inheritance. So you would have ads written around inheritance tax highlighting the difficulties your loved ones might have paying the Inheritance Tax bill and then show how life insurance would solve that problem.

Can you see how using the 40/40/20 marketing rule leaves you in a better situation in our £10,000 example?

By spending £4,000 (or 40%), you have immediately got more niched-down targeted and compelling sales messages that you can use on relevant audiences depending on which demographic they meet.

Now you know why the 40/40/20 marketing rule can immediately improve your ad spend return on investment (ROI).

Let’s move on to the next component…

Delivering the Message

So you’ve spent £4,000 of your marketing budget on creating a compelling message.

Next, you are going to spend £4,000 on delivering the message.

Let’s make no bones about this – delivering your marketing message is just as important as creating it. 

Identifying the best channels to reach your target audience and effectively delivering your message through those channels can make or break your marketing campaign.

There’s a lot to think about here, and market research will help you. 

During the ‘creating a compelling message’ component of the 40/40/20 marketing rule, your Copywriter will have established the demographics, personalities, pain points and desires of your target audience.

When delivering your message, you need to know where your target audience hangs out, what interests them, and what content they consume.

For example, suppose your target audience is comprised of young professionals. In that case, social media platforms like LinkedIn and Twitter may be effective channels for reaching them, so you will need to allocate a budget for these platforms.

Or suppose your target audience is mainly comprised of older adults. In that case, you might look at more traditional marketing forms like television and radio to get you the best results.

Once you’ve identified the best channels to reach your target audience, the next step is to deliver your message through those channels. 

Delivering your message can involve a variety of tactics, such as running targeted advertising campaigns on social media, investing in search engine optimization (SEO) to improve visibility in search results, or reaching out to influencers in your industry to promote your brand. 

Finding the best tactics for your business and your target audience is key.

When delivering your messages, you must ensure you remain consistent with your branding across all channels you use. Doing this will help establish trust with your audience and give your brand credibility.

You’ll also need to tailor and produce content relevant to the marketing channel you are using. Instagram will involve many visual components, YouTube will be videos, Tiktok will be short-form videos, and written content will need to consider SEO.

Testing and Refining

The final part of your 40/40/20 marketing budget will be spent on testing and refining your efforts.

In our example, this is where you spend your remaining £2,000.

Important

*** Marketing is not a set once-and-forget game ***

For your business to be successful at marketing, you’ll need someone on those ads, monitoring, measuring, analyzing and refining the performance of your message and delivery tactics at all times.

The testing and refining part of your ad spend will help you understand which channels and tactics are driving the most conversions and sales and will allow you to optimize your message and delivery to achieve even better results.

Conclusion and Summary of the 40/40/20 Marketing Rule

Now that you understand the 40/40/20 marketing rule, you can immediately start applying it to your marketing campaigns.

It’s essential to know and remember that although we have referred to it as a rule, it is a guideline that can help your business achieve the best return on investment (ROI) from your marketing efforts. 

You can adjust the 40/40/20 mix according to your business’s specific needs and goals.

But by following it, you know you are giving your business the best opportunity to succeed with your marketing efforts.

The 40/40/20 rule allows you to balance message, delivery, testing, and refining, giving you a well-balanced approach and a well-rounded marketing campaign.

You need to use the rule to help you avoid spending too much in one of the areas and not enough in another. Scrimping in one part of your marketing campaign will mean your campaign is not balanced, and at least one of your components will be lacking. If a part of your marketing lacks, you will not achieve the best return on your ad spend.

In summary, if you want to maximize your ROI and make the most out of your ad spend, the 40/40/20 marketing rule is a great starting point for you and your business to increase sales of your products and services.

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