How to Avoid the Marketing 'Money Pit'

How to Avoid the Marketing "Money Pit"
By Jennifer Beever, Marketing Consultant
© October 2005, New Incite Marketing Analysis and Design

Many businesses are wasting money in marketing and just don't realize it. Decisions are subjective, rather than objective and scientific. Businesses hear about marketing opportunities and race to meet deadlines. They react when vendors contact them with sales offers, rather than being proactive. They rush to change their web site or create new marketing materials, never thinking clearly about the demographics and psychographics of their target audience. They fail to track results of marketing activities that may or may not be producing the desired results.

The solution is to take some time to analyze the market and plan marketing before acting. Businesses need to be proactive about their marketing, not reactive. They need to study their target audience(s), making sure they understand their customer profile. To avoid marketing myopia, they need to follow and act on new trends when appropriate, such as search engine optimization, blogging and webinars. They should plan and budget their marketing for a year or six months, implement the plan, and then track results as they go along.

Analysis - Do Your Homework
Before reacting to solicitations for marketing and advertising activities, business owners have to do some "homework" about their message and their position in their industry. Does it fit their target audience? Does it still fit the products and services that the business offers? The message should be based on vision, mission and goals, and desired position of the business. With a clearly defined message based on market intelligence, businesses will be less apt to dilute their marketing with multiple messages and positioning.

This is the process of marketing analysis. By taking time to regularly investigate the current state of the industry, new opportunities and to confirm the business' vision, mission and goals, business owners put themselves in proactive mode, rather than reactive. They ensure that their marketing has the right business direction, rather than being led by a creative team with just the next new creative idea.

A competitive analysis can show how competitors are positioned in an industry. These analyses sometimes reveal opportunities or markets that are not being tapped or a new way to position a product or service within an industry. An analysis of existing customers through a survey mechanism or an interviewing process can reveal information about a business's current position (sometimes the business doesn't even know how it is really perceived) and about new opportunities and customer needs.

Planning - Create a Roadmap
Once the homework is done, businesses should create a written marketing plan that details the messages and what media will be used to get them to the right target markets. Having (and using) a plan helps ensure that the marketing will be integrated: that all aspects will have the same look and feel. Integrated marketing results in an effect called response compression - when a prospect sees or hears repetitive images and messages from a business in a short period of time, it makes that company top of mind with that person.

Not all marketing activities are right for all businesses. Some work well in certain industries but not in others. For example, in the software industry, PR, direct mail and trade shows are especially effective if done right. But, advertising is not the most cost-effective marketing activity for software companies. It's easy to choose the wrong tactic when there's a convincing salesperson selling it to you.

Before making a decision, business owners should find out if the activity is cost effective for the product or service that they sell. They can look at how competitors are successfully marketing or they can get help from contract marketing experts in their industry. If they are trying to decide on a trade show, attend the show first to evaluate its possibilities.

The plan helps businesses stick to a budget. With a marketing plan, the business has a baseline against which to evaluate new opportunities. Do we have the budget? Can we forgo one planned activity for a new one? In addition, the plan gives you time to negotiate with vendors and look for the best deal. Marketing done in an unplanned environment often results in expensive rush fees and wasted expense.

The plan also makes it much easier for creatives to provide the marketing collateral that fits the business and its objectives. With clearly defined target audience demographics and psychographics, a creative staff has an easier job of providing the right look and feel.

Tracking - What's the Return on Investment?
This leads to the third activity, tracking the business marketing results. Without tracking results, businesses have no hard data upon which to make decisions. It's not just quantity of leads - quality needs to be tracked as well.

For example, a business may find that an ad in a local newspaper generates a lot of leads, but the conversion rate for those leads is low. In comparison, a trade show generates fewer leads but has a high conversion rate. This may mean that ad produced less qualified leads than the trade show.

Businesses need to track the source of leads, cost per lead, conversion rate and return on investment for each activity. Armed with this information, a business can decide which activities produce the most results.

In Summary
Analysis, planning and tracking do not have to take up much time. Analysis can be done in a few days or a few weeks, depending on resources. Planning can be done in a matter of days - the time consuming part is getting quotes from vendors. And, tracking is an on-going activity. It takes about a half day to set up and then regular meetings to follow up on the information. With a minimum of effort, a typical business can get proactive about their marketing and make sure that their marketing dollars are not going down the drain, but producing great results.

Jennifer Beever is a marketing consultant and founder of New Incite Marketing Analysis and Design. New Incite is the outsource resource for growing businesses. The company provides marketing planning, implementation, results tracking and organizational development services for its clients. Contact author Jennifer Beever at 818-347-4248 or jenb@newincite.com.

This article may be reprinted with permission of the author. Please contact Jennifer Beever at 818-347-4248 or by email, jenb@newincite.com, for permission. Proper acknowledgment of the author, including name, company, and contact information, must be made with use.

Email

Recommend this page to friends/colleagues.