Marketing is not something that a company can simply throw money at or keep doing the same way year after year. If your business is hemorrhaging money on marketing, with very little to show for it, you may be guilty of one or more of the following tactics. Here are five signs that you need to perform a marketing audit.
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1. You Have No Idea What You've Spent On Marketing
This happens when a company does not have a set budget and decides to throw unspecified sums of money at a cause. If you do not have a specific dollar amount set aside for marketing purposes each year, then you may be spending more money than you should.
In the recession era, it is crucial for companies to make every dollar they spend matter. Gone are the days of spending money freely on old media forms of marketing. With the advent of DVR, blanketing the airwaves with television ads is no longer effective. As newspapers and magazines slowly die off, print advertisement has gone by the wayside.
At the start of each fiscal year, a company should make a strict budget, leaving themselves leeway for any unplanned expenses. You may be able to spend less on marketing expenses than you originally thought necessary if you take the time to do so. The old cliché is definitely true in this instance: if you fail to plan, then you plan to fail.
2. Your Company Spends Most Of Its Marketing Money On Sponsorship
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| Image by Flickr user reynermedia |
Whether it's sponsoring the local sports team, noteworthy events throughout the year, or a school fundraiser, saying yes every time the phone rings can be fatal to a company's bottom line. Do you pledge to support every single organization that calls your company and offers an intriguing story?
If so, it is time to take a long, hard look at your business tactics. While spending marketing money within the community can engender goodwill, it can also lead to a lack of proper financial planning for your company.
Unless you can find a tangible connection between sponsoring these events and organizations and an increase in business, these are marketing dollars that could be better spent in other places. Providing quality goods and services to the community should function as its own reward.
3. You Spend All Your Money Schmoozing The Same Clients
Has your company fallen into the habit of spending a vast majority of its marketing money to retain the same clients year after year after year? When your company spends the same money every year to keep the same clients happy, this is no longer marketing.
A client should continue to work with your business because of your superior quality, not because you spend superior money. Sure, it's nice to schmooze a client in a box suite at the big game, but is this practice going to take your company to the next level? Probably not.
Instead, you should be focused on trying to win new clients every year. While this may take more effort and a more clearly thought out process, there is no reason why you cannot be successful. Marketing involves coming up with creative tactics to reach out and touch those who seem unreachable. The definition of insanity is doing the same things over and over, while expecting a different result.
4. You Don't Know How Much Revenue Your Marketing Efforts Create
Perhaps your company spent $1 million dollars on marketing in the past year. That looks good on paper, doesn't it? However, unless you can also prove that these marketing efforts led directly to $1 million plus in new revenue, all this spending is for naught.
No business can reasonably prosper unless they are making every dollar count. Without a strong ROI (return on investment), there is no reason to be spending heavily on marketing. In the era of social media, there are a variety of inexpensive ways to market a product and be able to see a tangible return on your investment.
All marketing is not good marketing. This is a common myth and should be eliminated from your thought process completely. Unless you have a return on your investment that justifies the initial outlay of cash, the best move your company can make is to spend that cash in another, more productive fashion.
5. You Are Unclear On How Many Leads Your Marketing Plan Generates
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| Image by Flickr user AJ Cann |
Is your business unable to discern how successful their marketing plan is? This typically takes place when a business does not have a clear idea of how many leads each and every marketing dollar generates. If your company is spending money on marketing plans and cannot clearly define which, if any, new clients were generated from these efforts, it is time for an audit.
Generating leads is one of the hardest tasks for a company to undertake, which is why it is so tempting to open the checkbook and try to spend the problem away. But for every dollar spent, there needs to be a follow up.
If your company spends money on a social media consultant, how many new leads can be traced back to this? The same process should be applied to radio advertisement, television advertisement, billboards, whatever method your business deems the best for attracting new leads. Failure to identify the source of new leads means that it is time to open the books and perform a marketing audit.
