How to squeeze juice from your marketing investment
03.10.08
by: Nathan James, This article first appeared in the Ameriprise monthly newsletter to small business owners.

Many business leaders today, whether they market to other businesses or to consumers, express a deep frustration with their marketing efforts.

“We’re spending more, but getting fewer sales leads,” they say. “The media options are dizzying. I’m still not comfortable with our online marketing. And no one can give me a reliable R.O.I. scenario. I know I have to invest in marketing to be successful, but I’m concerned that much of our investment is wasted.”

If you feel similarly, there’s small comfort in knowing you’re not alone. In fact, almost a century ago, Sir William Lever, founder of packaged goods giant Lever Brothers, complained, “I know half the money I spend on advertising is wasted. The problem is, which half?”

So what’s a responsible business owner to do? Here’s a checklist of thoughts, attitudes and actions that will help you squeeze the most from your marketing investment – and to sleep better, knowing that you and your marketing team have done the best job you can:

1. Accept that the audience now controls all marketing communication.
For decades, mass media ruled. ‘Branding’ meant stamping your product or service on the minds of consumers so often, they couldn’t escape or forget you.

But in the past decade, technology has changed all that. The Internet, TIVO, XM radio, iPods, and other wonderful innovations add up to a startling fact: No one will see or hear your message unless she wants to.

To successfully navigate this new paradigm, marketers must make their messages desirable for their audiences to see and hear. This means not only message content, but also how and when the messages are received.

Hansel and Gretel found their way back home through the forest by leaving a trail of bread crumbs. Successful marketers today think of leading their audiences to them by leaving a trail of enticing morsels of communication – in just the right locations, at just the right frequency, to be consumed at the audience’s desire and convenience.

Mass media branding is dead. Time to start leaving bread crumbs.

2. Accept that you will probably have to spend more. Then do.
When we meet with new clients, one of the first questions we ask is, “What percent of revenues do you spend on marketing?” The answer is almost always far below what’s required.

A traditional rule of thumb is that consumer marketers need to spend up to 10 percent of revenues on marketing, and business-to-business marketers need to spend up to five percent of revenues. Media proliferation, and the ability for people to screen out your messages, has put upward pressure on those numbers.

If you want to feel better about re-apportioning your budget, consider this: the only investment you could make in your business better than marketing are outstanding employees who never leave. American goods and services have become commoditized. Marketing is the path to success.

3. Press for measured results.
Everyone wants the Holy Grail of marketing, the single silver bullet that conquers all challenges. And here it is:

1. Set measurable objectives whenever possible;
2. Analyze results;
3. Continuously improve.

To fall short of this methodology is to miss out on the recent progress made through technology and marketing science. There are many books on this subject, but you can improve simply by constantly asking, “What would be meaningful for us to measure, and how can we measure it?”

4. Perform a gut check on your marketing team.
This is true whether your marketing is in-house, through an agency, or both. Here’s what to ask yourself:

1. Do they know what they’re doing?
2. Do they put my businesses’ or my customers’ perspective above their own?
3. Do I know exactly what I’m paying them, and what I get for it?
4. Are they constantly striving to track results and improve?
5. Do they always prioritize marketing strategy above creative execution?

If the answer to any of these questions is ‘No,’ consider a change of team.

Back to Fishbone's Blog Menu