Mention marketing budgets to small business owners and a look of dread mixed with frustration may cross their faces. Why? Because marketing seems expensive on face value and almost anyone in business can recite a situation where “marketing” was a waste of money. This is a shame as marketing, when conducted properly, is the most cost-effective way to reach a mass buying audience and grow business. In other words, succeed.
In reality the challenge isn’t with marketing itself but with what happens behind the scenes before dollars are spent. Problems stem from buying the wrong item, cutting corners in critical situations, and hiring the wrong people as marketing guides, which in turn results in wasted money and bad feelings. These problems are also part of the following 11 quick ways to waste money in marketing and ensure a lack of success.
1. Taking on too broad a buying audience.
A critical component of successful sales is knowing one’s audience and tailoring the message accordingly. This is even more true in marketing where a company’s message is communicated on a mass scale rather than the easily adapted face-to-face sales environment. Yet even with this knowledge, some small business owners mistakenly embrace an ‘all things to all people’ approach to their marketing that requires either a flat, generic message that doesn’t motivate anyone or a vast collection of marketing materials addressing individual buyer types. Both are an ineffective use of marketing dollars. To make the shotgun approach work in marketing, a business would need an unlimited marketing budget and a team of marketers to customize each communication. The better solution is to spend a little budget to correctly profile the business’s true buyer(s), which ultimately saves money while yielding positive results.
tip: it pays to create a real buyer profile and align marketing efforts with these buyers’s activities, particularly when budgets are limited.
2. Going overboard on promotional items.
It can be great fun to see one’s logo and business name on everything, but small businesses need to beware that the giveaway and gimme promotional field is littered with money wasting land minds. Despite what a promotional company may pitch, it’s simply not all that common for businesses to gain clients from items like pens, branded candy, koozies, stress balls, mouse pads, pocket tip cards, etc. And no one is going to cross an exhibit hall to pick up a keychain! The reality is that these items almost always end up in a junk drawer, the trash, or in a kid’s toy chest, meaning that they are wasted marketing dollars. Promotional items certainly have their place in marketing, but for them to have any worth they need to be unique, truly useful in the buying audience’s world, and desirable.
In the same vein, unless a business has a knockout logo and an established brand with incredible caché, buying branded coffee mugs, t-shirts, and ball caps, etc. for resale is another way to flush money down the toilet.
tip: when promotional items are required, spend time seeking out items that are unique and useful in business.
3. Cheapening out now leads to spending even more in the future
There’s a time and place for seeking out low priced options, however, when it comes to a company’s image and developing marketing program, sometimes paying more is the more cost effective option. Cheapening out in key marketing areas will often require expensive repairs and fixes in the near future. This is especially true in higher level work such as hiring someone to write a marketing strategy or build a brand, both situations where experience and expertise matter more than price. After all, a strategy will dictate other marketing efforts, including a suggested budget, and a brand is the business’s visual identity. Cheap doesn’t cut it here, especially when an experienced professional will cost less than $2,000!
Another situation relates to technology and infrastructure, as in the case of business web site development. Yes, there are free or inexpensive web sites options available, but these are often cookie cutter, functionally restricted sites that aren’t built with modern technology, such as responsive design (automatically adjusts a site to any viewing device from smart phones to laptops). Since the buying public is increasingly using mobile and tablet devices for web surfing, that inexpensive web site may cost much more in lost business from buyers who won’t deal with an outdated, cumbersome technology. Boring design and limited functionality reflects badly on a business and can have a tremendous impact on its brand. It’s also a case with less expensive sites (under $2,500) that the content has not been written by a marketer strategist who has both the business and its buying public in mind, not just the site’s layout and imagery.
tip: on big marketing items that will impact the company’s program or are highly visible, it pays to invest a little more money rather than risk losing business.
4. Ordering large runs on expensive brochures and sales folders.
Marketing materials such as brochures and sales packages can be invaluable tools, particularly for non-retail and service-based businesses. However, the days of printing thousands of multi-page corporate brochures and sales folders are rapidly going by the wayside for two distinct reasons. The first is that the buying public expects businesses to have a well thought out web site where they can find out more information without cluttering up their offices. The second is that digital printing has been perfected to the point where ganging large runs of more generic materials to keep press costs down is no longer an issue. In fact, affordable digital printing allows businesses to completely customize their materials and print only what they need, ensuring fresh and on-target materials — and cleaner storage rooms.
tip: use digital printing to print shorter, more customized runs, eliminating waste.
5. Saying yes to advertising space and sponsorships
Anyone who has been in business for any length of time has received at least one, more likely 20+, calls to advertise his or her business in the media, online, or in more unusual places like stadiums or grocery store carts. Advertising is one of the priciest marketing tools available, making it one of easiest ways to quickly blow a marketing budget. It’s also an area where consistency is crucial as single ads, particularly smaller ads, rarely provide enough business to justify their costs. Success with advertising depends entirely on well designed, ‘large enough to be noticed’ advertisements that are consistently placed in researched and targeted outlets. Anything less is a waste of money.
Much like advertisements, sponsorships are a frequently requested business expense. It’s both business smart and generous to support local community efforts, however, saying yes to every opportunity will rapidly eat up a marketing budget. Small businesses that want to support nonprofits and local efforts but have a limited budget should select a few that best reflect the business’s personality, beliefs, and, again, target audience. They can then share this support via their business web site and social media outlets, thereby letting others know that the budget has been earmarked.
tip: be judicious when selecting advertising space or sponsorships by first researching the audience that will see the ad. If the audience isn’t a strong match with the business’s buyer profile, skip it.
6. Rebranding without cause
Any business that has existed for more than a few years will probably run into rebranding worthy situations. These are healthy business responses to changes within the marketplace, buyers, products or services, or societal trends. There are also times when rebranding is necessary to correct a poorly developed brand. Rebranding is an expensive process requiring research and a strategic plan, but as branding is the buying public’s interpretation and visual link to a business, it is important to keep a brand current and make sure it speaks to the right buyers. Not all rebrands are strategic in nature, and this is where money is spent senselessly. Rebranding ‘just ’cause’ to incorporate new favorite colors, a relative’s interpretation of the logo, inspiration on a new name, or other such whims is a stupid waste of marketing money.
tip: take the time to develop a proper brand plan from the beginning and only make modifications when the current brand is an impediment to future sales.
7. Not following up on sales opportunities
One of the biggest ways to waste money in marketing is to focus on collecting leads without taking the extra steps to follow up on them. Leads are absolutely useless until they are converted to sales!! Following up doesn’t mean having an intern send a form email or shuffling a lead from employee to employee before someone leaves a stiff and rambling voice mail weeks later. For marketing to have any value, a business must embrace a lead follow-up program and stick with it every time. The business world is riddled with stories of seemingly lesser leads turned into unexpectedly big clients and a good rule is to follow-up with each lead, just in case. A business should never be too busy to professionally follow-up on leads within 24-48 hours, preferably by someone at management level.
tip: have a standard format email or voice mail that can be easily customized at the ready to respond to leads within 24-48 hours.
8. Hosting open houses / networking events, badly
There are times when a business may feel it should hold an open house or networking event. Maybe it’s to commemorate a number of years in business, a new and exciting service or achievement, or simply to thank clients, but in almost all cases it requires food, beverages, gifts, and some sort of entertainment. In other words, money. Open houses and networking events are wonderful ways to build business and subtly sell to a captive audience, however, even the best intentioned of these events become wasteful failures when too few (if any) of the right kind of buyer show up. Why? Many times it’s because the event was put together at the last minute, on a day that conflicts with another event, without a strong enough draw, and / or was under-promoted. If a business is going to host an event, it should take the time to plan it out properly, with a theme, nice door prizes, good food, and well scheduled and timely promotions targeting prime buyers. There are few situations in marketing more frustrating than spending event money, only to have a few family members and that one longtime client with nothing better to do show up.
tip: Take the time to plan out events, including the date, draws, and audience before spending any money. If an event can’t be done at the right time with the right audience, save the idea for another day.
9. Nixing the marketing budget or sacrificing consistency to save money
When times are tough, pulling back may seem like a solution, but cutting marketing will end up costing the business more in the long run. That’s because marketing is the path by which new buyers are discovered and become engaged in the business’s products or services. Without marketing, there are no new buyers which eventually will kill a business. Rather than nixing marketing outright as some small businesses do, it’s better to scale back and focus on efforts that provide the biggest bang for the buck, as outlined in the marketing strategy. If there isn’t a marketing strategy in place, that’s the first place to spend money.
Furthermore, if research shows a marketing effort is a good match with a business’s targeted buyers, then consistency is required to have any kind of impact. It takes time to build buyer loyalty and convince a buyer to part with her money. Too many small business owners try something once and then bemoan that they didn’t receive any business from the effort. Of course not! People today are inundated with advertisements and messages, and it’s easy to miss a single effort. Trying a series of one-off’s or spitting and spurting one’s way through communications will result in spotty results and low ROI. Instead, rely on the strategy’s research, narrow down the list to the best possible options, and try them at least 3 times.
tip: focus marketing efforts on the biggest ROI potential when times are tough. Maintain consistency rather than trying single efforts.
10. Hiring unqualified people to guide your marketing
It’s a common sense practice in business to hire people who know what they’re doing or risk spending money in either a repair job or revenue loss. This is especially true in marketing, a field that has became muddied and confusing to outsiders, most likely brought about by the number of graphic designers, print shops, and media outlets that slapped “strategic marketing” and “brand plans” on their service lists when they really only offer design services. While there are exceptions, these types of firms seldom staff experienced marketers who can create a strong and completely custom marketing strategy that take all marketing tools, not just shop services, into account.
When it comes to marketing, if the firm isn’t planning on having an experienced marketer conduct exhaustive, custom research before developing a high level strategy, web site message, or campaign concept, they’re not doing the business any favors and are probably a waste of money.
tip: ask any potential marketing firms about their experience, range, and process for developing marketing strategies and projects.
11. Bundled projects
Marketing is never a one size fits all exercise and trying to force a marketing bundle on a business usually results in at least one unnecessary – and wasteful – project. It’s far better to work with a firm or service provider that offers à la carte project or service pricing that can be customized for a specific business. That way marketing budgets are spent on projects the business actually needs – and can afford. It’s also the best way to execute a marketing strategy’s project list, particularly in terms of a timeline. The same holds true with services like web domain registration and hosting where splitting providers is often to a business’s advantage, both in price and service.
tip: seek out firms that offer à la carte projects to better execute a marketing strategy.
Marketing isn’t a budget’s enemy. The true enemies are a lack of understanding, planning, and failure to follow-through, which will all end up costing a small business more in the long run. The more cost-effective path, especially when budgets are limited, is to take the time to strategize and match a business’s marketing efforts with a realistic buyer profile. This effort will save money and yield stronger results and turn even the biggest naysayers into marketing believers.
Written by Bonnie Taylor, CCS Innovations, LLC’s Chief Marketing Strategist and author of the bestselling book, I Think I Need Marketing. Named one of 2014’s “Top 40 Digital Marketing Luminaries & Educators” by the Online Marketing Institute, Ms. Taylor has spent the last two decades focused on Strategic Marketing and has been instrumental in leading many small to mid-size businesses to growth awards and international expansion.