How to Online Companies Like Xero Get Their Marketing Started

There are plenty of ways to market an online business, but few of them are as effective as creating a digital marketing plan.

What is a digital marketing plan?

Well, it’s a plan designed to reach potential customers through online channels.

In practice, this means creating content to distribute through different platforms like blogs, social media, and web portals.

You’ll want to coordinate your marketing efforts across these channels to reach your ideal audience. And to make sure you reach them precisely, you’ll need to put some thought into creating a marketing strategy.

Why should you create a digital marketing plan?

It provides you with a clear overview of your marketing activities. It connects the dots between specific marketing actions and measurable results.

This is particularly useful for measuring the success of your marketing efforts. You can start by tracking the number of leads generated through various campaigns. Then, you can analyze the effectiveness of each campaign’s marketing channel and determine which one produced the most promising results.

How does this relate to Xero?

Xero is a cloud accounting software company that was founded in 2003 and is headquartered in Sydney, Australia. They also have offices in New York and the United Kingdom. So they are obviously an established company. But how much do they spend on marketing?

To find this out, I analyzed their most recent annual report, looking at the cost of goods sold and marketing expenses.

Here’s what I found.

Cost of Goods Sold (COGS)

COGS is the total cost of materials and supplies used to produce your product or service, less any expenses typically deducted from profit such as shipping and handling fees, agent commissions, and so on.

Looking at Xero’s most recent annual report, I saw that their COGS was $27.4 million in 2018, and $27.5 million in 2017. So it appears that their COGS remained relatively stable in the $27 million range throughout the past two years. This is a good sign since it shows that they are capable of producing high-quality products without worrying about whether or not they can cover their costs. This is also confirmed by their financial analyses done by Zacks Investment Research which rank Xero among the top 5,000 largest publicly traded companies in the United States.

Marketing Expenses

Marketing expenses are the costs you incur in order to market your product or service to customers. This could include everything from paying for ads on social media platforms like Facebook or Google Adwords, to hiring an inbound marketing strategist to help you develop your marketing strategy.

Looking at Xero’s most recent annual report, I saw that they had a marketing expenses of $11.8 million in 2018 and $11.7 million in 2017. But this is slightly less than the $12 million they spent in 2016. So it appears that their marketing expenses dropped by almost 6% in the past two years. What is responsible for this drop?

One reason could be that they shifted gears and began focusing more on digital marketing in the past two years. In 2018, they spent $5.8 million on “marketing & communications,” $4.9 million on “e-commerce & logistics,” and $0.7 million on “public relations.” These are costs that would not have been included in their previous marketing budgets. So it seems that they put more effort into digital marketing than traditional offline marketing.

Overall Advertising Expense (OAE)

The overall advertising expense (OAE) is simply the sum of the COGS and the marketing expenses. This is the total spending on advertising and marketing.

Looking at Xero’s most recent annual report, I saw that they had an overall advertising expense of $17.6 million in 2018 and $17.5 million in 2017. So it appears that their OAE increased by about 2% in the past two years. What is responsible for this increase?

One reason could be that they were expanding their advertising and marketing efforts to digital platforms in the past two years. In 2018, they spent almost $6.7 million on digital advertising, almost $6.3 million on social media advertising, and $1.7 million on email marketing.

What Does This All Mean?

Well, it means that Xero is doing a lot of innovative things with their marketing strategy which is paying off. It also means that they are using specific metrics to track the effectiveness of their marketing efforts.

For example, they can measure the return on investment (ROI) of their social media marketing campaign. This could be calculated by taking the total number of leads generated by their social media ads and dividing it by the cost of the campaign. This is a commonly used metric to measure the success of marketing campaigns on social media platforms.

Similarly, they can track the ROI of their email marketing campaigns. This could be done by taking the total number of new leads generated by their email marketing program and comparing it to the cost of the program. Then, they can allocate a percentage of their overall marketing budget to each channel and monitor the results.

So, what are some innovative things Xero is doing with their marketing strategy to gain business?

They Are Generating Leads Through Content

It is well-established fact that people trust companies much more than they trust individuals. This is why salespeople are not typically the best choice for getting in touch with someone about a purchase. This is also why businesses use salespeople to generate leads instead of relying on good ole’ fashioned advertising and marketing.

You might be thinking that Google is the be-all and end-all of search and that paying for advertising is the key to gaining business. But in reality, a lot of companies succeed without paid search ads or social media campaigns. These things just help businesses get their foot in the door. Once they are in, it is all about the content.

Take Shopify, for example. They are a company that provides e-commerce platforms for small businesses. And they get their leads from blogging and video content.

It is said that content is the king of marketing. This is certainly true in Google’s world. But in the real world, content is not necessarily king – it’s queen.

To become queen, you need to be the one providing the service or product. So, in the realm of marketing, you need to be writing blog posts, creating videos, and so on.

Let’s take Shopify as an example again. They provide e-commerce platforms for small businesses, so they understand the challenges customers face in running a business online. Furthermore, they believe that businesses should control their own destiny and should not be controlled by large corporations. Also, they understand the importance of SEO and how to drive free traffic to their site.

With all of these characteristics, it is not a surprise that Shopify was able to grow rapidly and be a $10 billion company in under 10 years. But none of this would have been possible had they not been able to generate compelling content.

The same can be said of Xero. Without blogging, online video, and social media content, it is unlikely that they would have been able to grow as rapidly as they have.

If you want to be a successful marketer, start creating content.

Content Is Key

It is well-established that content is king or queen, as mentioned above. But this is not simply because people love to read or view content.

In fact, there is a wide variety of content people love to consume, from long-form articles to short-form lists or bite-sized pieces of content like infographics or videos.

These are known as the “content magnets” because they attract certain audiences and encourage them to take some form of action – like making a purchase or signing up for a mailing list.

So, as a marketer, you need to make sure that you are creating the right content for the right audience.

What is the right content for Xero?

Well, it depends on what you are trying to accomplish. Are you trying to generate interest in your product? Are you trying to persuade someone to take a specific action (like purchasing your product)?

Each type of content will have its own unique set of tactics and strategies. But none of this will matter if you don’t have the right content.