When the economy enters an uncertain stage and sales begin to slow, owners of previously growing businesses are tempted to temporarily step up marketing efforts only to cut back after a brief period of time because they do not see an immediate increase in sales. This is just an overreaction to a drop in sales and could prematurely result in lost faith in the attributes of marketing. One of the central rules of successful marketing is “following through.” A marketing campaign that starts and then impulsively stops midstream will have been a preventable waste of money.
Before a campaign begins, it is important to specify goals, anticipate costs, and plan time frames. Here are a few questions to ask yourself when it’s time to step up marketing efforts:
How many leads (inquiries) does the business need? By when?
Remember that marketing programs are supposed to generate interest. It takes a focused effort to qualify the leads as prospects and close deals.
Marketing programs will not resolve sales problems. In fact, a successful marketing program will frustrate a struggling sales staff because it could generate more leads than the sales force can handle. A company should invest in marketing if it has insufficient leads.
What is the dollar value of a lead?
If the marketing and sales efforts have been tracked in the growing business, managers will know how much an average order is, how many prospects/proposals are needed to land an order, and how many leads are needed to generate those prospects. These facts will help the managers compute the dollar value of a lead.
How much money can be invested in the marketing campaign to generate the desired number of leads?
If the business has a standard operating budget in place or the decision-makers know how much net profit is generated from each order, plus the anticipated number and dollar value of leads, then the amount of money that is reasonable to invest in a new marketing effort can be calculated. Certainly, the managers must also review the company’s cash flow prior to committing to a stepped-up marketing campaign.
What target market is the marketing campaign designed to attract?
Shotgun-marketing programs are costly, hard to track, and usually much less effective. A well-focused direct mail or telemarketing program to 100 people will produce more results than a vague, general pitch to thousands.
Were the target markets selected based on objective research that indicated a need for, or receptivity to, the company’s products and services?
Often, targets are selected in haste for personal reasons. For example, a company begins to aim its marketing message at college students living in dormitories because the business owner has a college-age daughter. Make sure that the people you are marketing to actually want or need your products and services!
How has the receptivity of the target markets to your products and services been tested?
It would be a costly error to assume that a target group will appreciate what you have to offer. Before a lot of money is invested, it is important to know if there is sufficient market potential. It is also important to know the unique purchasing patterns of individual populations. What benefits need to be relayed to prospective customers to encourage them to buy from you?
Why will the new marketing efforts generate more leads than existing marketing efforts?
Throwing money at marketing will not necessarily produce an improved return on investment. Increased investment in a new campaign should be based on evidence that sufficient improvements have been made to warrant increased expenditures.
Will the new marketing efforts result in increases in the frequency or average size of orders from existing customers?
Revenue growth doesn’t always have to come from new customers or new products.
How long will it take for the new marketing efforts to produce results?
It is not reasonable to expect an immediate increase in sales. Marketing is not a quick fix especially if a new campaign follows an extended period without marketing. People need to see an advertisement, hear a slogan, see a company representative at an association meeting, or be exposed to a company an average of six times for recognition. A sudden blast of several marketing messages at once can actually confuse the listeners.
What is the strategy behind the marketing tactics?
So often, entrepreneurs get caught up in the details involved within a marketing program. For example, they focus too much on specific articles within a newsletter, the wording of a press release, or the names on a mailing list to be used in a direct mail program. Executives need to spend their time on strategic decisions related to pricing, location, product quality, service guarantees, and overall promotional themes rather than specific details.
The logic behind a marketing program can and should be stated up front. The goals for the investment can and should be quantified. Targeting and testing is time well spent. Once a marketing program begins, it deserves a chance. Success in marketing is best measured in inquiries and leads. The sales force needs to be prepared to handle more and better leads once a marketing program begins. Stop/start marketing is not a constructive response to shifts in economic winds.
Known as The Growth Strategist®, Aldonna R. Ambler, CMC, CSP helps rapidly growing midsized companies (typically $20 – 200 million/year) realize their goal of Achieving Accelerated Growth With Sustained Profitability® through opportunity/resource analysis, executive coaching, strategic working sessions, and her intermediary role regarding growth financing. Her clients are among the brightest, most ambitious business leaders whose names now appear on published lists of the fastest growing privately held corporations. The recipient of 23 prestigious awards for her success as an entrepreneur and industry leader, Ambler hosts a peer-to-peer-to-peer Internet radio program, aptly called The Growth Strategist®, which features lively interviews with CEOs of midmarket companies who have successfully executed the growth strategy of the week. She can be reached toll free at 1-888-Aldonna (253-6662), by e-mail at Aldonna@AMBLER.com or online at www.ambler.com.