By MARK RIFFEY, for the Flathead Beacon.
When something is viewed as an expense, your instinct is to reduce it to the smallest possible amount.
Doing this to your marketing is not unlike choking yourself.
Marketing as an expense
The most obvious clue that a business treats marketing as an expense is that they cut back on it when things get tight.
It makes sense on the surface, but it’s a clue that the business doesn’t know what works and what doesn’t.
For these businesses, the marketing goal is typically to get the next sale. Focused there, little effort tends to be invested in the “care and feeding” of existing customers.
Without that care and feeding, you’re focused on people who woke up this morning, decided to buy an item and looked (for example) in the paper for a coupon. This buyer often has little or no preconceived notion where they will buy that item. Even if they planned the purchase, the where is still up in the air. Not what you want.
All such businesses compete for the low hanging fruit, the “uncommitted to any particular vendor”, the random, the price-at-all-costs shopper. Any buyer can fall into those categories if the vendors in that market do nothing to change it.
When you do this, you’re depending on buyers to randomly cross paths with you at just the right time. It encourages customers to shop solely based on price and/or what side of town they’re on and where their errands take them that day. On top of that, these businesses reward that buying behavior with a coupon discount for “just passing by”.
The way these businesses spend marketing dollars, it *is* a cost.
Marketing as an investment
To fix this problem and transform your marketing into an investment, you have to know what works.
When you know what works, you know the typical return on investment. That helps you avoid pulling back on marketing to cut expenses because you know better. If you put a dollar into something and get two dollars back plus a new customer, it doesn’t usually make sense to back off (capacity issues would be a valid reason).
In a time of uncertainty, many businesses pull back by instinct. On the surface, austerity of this nature makes sense. These cuts a business usually shrinks. You can see this going on now – leaving an opportunity for the business that’s paying attention.
Meanwhile, the business who knows the return on investment for their efforts can increase their marketing to increase their revenue (or maintain it in a slow economy) whenever they’re ready.
When marketing is viewed as an investment, a sale is made to get a customer. Each customer is viewed as an asset to be treasured and well-cared for. The relationship between the business and the customer is maintained (at the least)
Learning what works isn’t about changing what you do. Just start measuring results *then* adjust based on what you learn. No matter what media you use for your advertising – the results can be measured without expensive tools or technology – often using none at all.
What it’s really about
Because your goal is to get (and keep) another customer, you have to understand that the business you’re really in – finding and attracting the perfect/ideal customer for what you do – and then retaining as many as possible.
So many are waiting for the customer to decide, to step up, to figure it out. Do you have time for that? Even when a customer checks a reference service like Angie’s List, that’s still a customer whose “where to go” decision is uncertain.
Few business expend the effort to guide the customer, to establish in their minds who the no-questions-asked best vendor is so that when a purchase is imminent, there’s already a preferred vendor in the customer’s mind. When you do the necessary work to identify the perfect customer and do exactly what it takes to attract those customers – market share doesn’t matter. You can go get more customers based on your numbers because you know what works.
You can probably name a vendor that you would do business with to the exclusion of all others. Your job is to be that vendor in your market.
Check out the Make it Missoula’s Tips for Starting a Business in Missoula, MT and other Business information.
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Want to learn more about Mark or ask him to write about a business, operations, or marketing problem? See Mark’s site, contact him on Twitter, or email him at mriffey@flatheadbeacon.com.
Check out the Flathead Beacon archive of all of Mark’s blogs.
