Never Underestimate the Power of Marketing
We spend far too much on marketing," a CEO told me as we performed the business card swapping ritual at a Los Angeles networking event.
"In fact, as we review potential cutbacks in the operation, I am seriously considering a sharp reduction in the entire marketing budget," she continued, "We just cannot afford it right now, not in this environment."
"Is it really too much marketing," I asked, "or just not the right marketing?"
We never did get to finish the conversation, but it got me to thinking about the number of companies which are cutting back these days, often to appease Wall Street.
One knee-jerk reaction to tough times at many companies is to cut the marketing budget. A more proactive approach would be to take a hard look at how marketing funds are spent and the cost-effectiveness of those expenditures.
Do not underestimate the power of marketing. If your company is losing market share and facing decreased revenues, the appropriate response may very well be to increase marketing, to make sure your company's message is getting out correctly. This can be particularly effective when competitors are cutting their marketing budgets. Increasing the amount spent, particularly on advertising, could enable you to pick up new customers at the competitors' expense.
Even if some cutbacks are inevitable, they should be prioritized with an eye to the big picture. That's where assessing the effectiveness of your efforts is important. Re-allocating the same budget total across a new set of priorities can often have very positive results.
Consider the following marketing components:
Advertising. Are you spending enough? Do you have an appropriate mix of print, TV, radio, and online media? Are you buying full-page, four-color ads when a half-page black-and-white would be as effective at a fraction of the cost? Conversely, if you can show (through careful testing) that color ads draw in enough additional business to cover the expense, stick with (or move to) color.
Is your advertising targeting the right customers? While marketers often sense this intuitively, can it be objectively verified? The 2000 U.S. census has called attention to sweeping changes in the demographics of many regions, and similar changes are undoubtedly occurring in other parts of the world as well. In the words of one pundit, "we are not who we used to be."
Most publications that solicit advertising provide updates on their demographics. It is essential to review these guides annually. Marketing must be directed to the right audience, and quality, not quantity, should be the guiding principle. You may very well need to create different campaigns to appeal to different market segments.
It is also important to test your marketing. Is it truly effective? Is the copy tired and out of date? Could it use a fresh look by someone other than the person or organization that created it? Is the artwork current? Pre-launch testing of your next campaign may be money well spent.
Direct mail. Direct mail has always been a relatively inexpensive marketing approach, and now e-mail makes it even cheaper, although remember that the effectiveness of e-mail remains substantially lower than traditional hard-copy mail. Also many people's reaction to e-mail that they perceive as "spam" is much more negative than their reaction to hard-copy "junk mail."
Public relations. Frequently neglected in the marketing mix is public relations. The distinction between PR and advertising is that PR is free. Press releases about new strategic alliances, major sales, executive appointments, and other company news are welcomed by many publications, and provide an easy way to inform the public about the organization.
Properly done, your own pre-packaged editorial content, such as interviews with executives, may be published in toto by trade journals looking for content, and can promote your company in ways that advertising cannot touch.
Trade shows. A presence at key trade shows can have immense marketing benefits, whether you put up a big booth or simply get key staffers out on the floor. Mingling with your clients and suppliers in a relaxed atmosphere can provide significant (if somewhat intangible) benefits. And your competitors will probably be there; keeping up with them is vital to shaping your marketing effort.
Collateral materials. These include brochures and other hard copy pieces as well as your online presence. As with your advertising, it is important that they be fresh, tasteful, and appropriate to the audience. The written word can go a long way.
Marketing is vital to all organizations. There is no such thing as too much of the right marketing.
