Getting a Stronger Return On Your Marketing Investment

Balancing short term and long term marketing objectives can be a struggle for a small business.  Here’s an idea for stretching your marketing dollar. 

When cash flow gets tight, many small businesses look for ways to “find more money” in their current expenses. Smart business owners know that by cutting the marketing budget in the short term, they will be turning off the pipeline for future sales. 

So what to do?  Maybe just divert.  Making a minor switch could actually increase response and lower costs. 

How is that possible? 

Barbara Rozgonyi (speaker, marketing consultant & small business owner herself) at Wired PR Works suggests that PR delivers a stronger ROI than advertising for a small business.  Take a look at her recent post: How to Find Marketing Funding.  She offers a ROI tool in the form of a chart to review marketing effectiveness.

Think about the last time you ran an ad.  Then think about the last time you had a press release published.  Let’s use the example of a local newspaper:

 The Ad:

  • ran on the day you specified
  • had a box around it on the bottom of the page
  • cost a little because you probably hired a graphic designer to create the ad (maybe the newspaper offered their “free” resources)
  • cost a lot for media distribution (between “4¢ and 10¢” a potential customer – I’m just guessing — you’ve got to figure your cost per circulation based on your local media)
  • got noticed (maybe 4 or 5 coupons for discounted/products redeemed or 3 or 4 phone calls.) Not that many?  Whoops!

The PR:

  • ran two weeks after you wanted it to
  • was at the top of the page and it looked like a reporter wrote it
  • cost a little because maybe hired a writer to create the press release (maybe you wrote it yourself)
  • cost “nothing” for insertion and cost of postage for mailing, nothing for emailing.
  • got noticed (people didn’t call/come in immediately, but months later people would mention that they read about you in the paper!)

The downside of PR is that it is a longer term investment, it doesn’t deliver dollars to the top line immediately. But by replacing today’s ad with PR, you will add $ to the bottom line by shrinking costs. And still not abandon your marketing efforts! 

Ads help to sell product, get the phone ringing right now – especially when paired with a short term promotion, discount, give away.  The benefit of PR is that it helps raise your total goodwill, net worth by building awareness.  If your potential customer never heard of you or knows anything about you, how is 10% off going to make a difference?

I believe that if you invest in the PR, the brand image, the long term stuff — that the short term problems tend to take care of themselves. 

One of the more important benefits of PR vs Ads is that you’re not jumping around from ad-to-ad, promotion-to-promotion, coupon-to-coupon — training your customers to wait to buy until you have another “deal” on the table. 

And as a marketing consultant myself, I feel this is better for small business owners since they are usually busy juggling all the business functions – R&D | Marketing | Sales | Operations | Accounting | HR | IT | Planning – so having a longer term marketing program in place helps to keep things manageable!

Create a Focus for Successful Marketing Results

What’s the focus of your business, your services, your products or your blog?

If you can’t offer an answer with just a word or two, or you hesitate because you carry 2 or 3 business cards… you may be finding that your not being as effective, successful or fulfilled with your progress as you would like to be.

Can you name your target market, message, media methods and measurement goals? You should be able to easily recite these like your phone number or email address.

By adding focus to your day, month and year, you’ll be pleasantly surprised at your progress. This is the beginning of the second quarter. What is your focus?

Flickr Creative Commans image courtesy of Ihtatho.

Tags: Marketing Strategy, Blogging, Branding

Managing Expectations to Maintain Market Share

Did you hear today’s morning news about JPMorgan Chase buying Bears Stern for $2 a share in a hasty deal put together and finalized on a Sunday evening?

I think that this makes it tough for the other large financial institutions to maintain their market capitalization and maybe even their market share.

In the course of just minutes, I heard a lot of speculation:

“This is the beginning of the bottom, we’ll see things getting better.”

“This is the tip of the iceberg, we’ll see things getting much worse.”

How do you manage expectations with so much speculation? ‘

Today the fed is cutting interest rates again, the euro is at an all time high against the dollar. Yen fluctuations are confusing. The old tried and true, “Don’t sell during the panic… the only ones who lose are those who sell!” sounds good, until a large financial institution has to sell at the bottom to avoid bankruptcy. It’s not just companies that can face bankruptcy, as Bunch & Brock Law Firm can attest to when it comes to many of their clients. It can happen at any time to near anyone, depending on the circumstances. If you find yourself in individual debt, the likelihood of you becoming bankrupt is very high. There are many lawyers who are available to help with bankruptcy case in Columbus or in your local area so you have the best chance at being able to get the situation resolved as quickly as possible. The same applies to businesses that find themselves with a similar problem.

So how do the marketing strategists grow business during this cycle? I guess JP Morgan Chase sees it as an opportunity to grow market share. Other financial institutions may focus on just maintaining market share.

Last Thursday the Bears Stern CEO was quoted as saying everything is stable. Even this morning, their website has this nice chart on the page under the widget link called “Safety of Customer Assets.”

The home page did announce that their earnings announcement scheduled for today will not occur.

So how do financial institutions get the trust back? How do you maintain brand equity in the face of such rapid change? What are the implications for the industry?

PR & Marketing: Chicken or the Egg?

 

Is PR a function of marketing?  Or is it a separate function all on it’s own? Or is marketing a function of PR?

This is a subject that I struggled with, deeply, for about a year or two after I graduated from Kent State.  You smile. Okay, I was naive.  At the time, I believed back then that PR was its own entity in an organization, offering sage advice, leading the way during times of crisis and waving the corporate/organization logo on a flag during the good times.

After graduating with a BS in PR and entering the working world, I learned over and over again — in both the non-profit world (Red Cross & a church headquarters) and corporate: Dart, Kraft, Hasbro & Rubbermaid — that PR is viewed a subset of marketing.

 Maybe not in the books.  Or in college classrooms. But in real life.

 There are PR professionals who disagree — check out Bill Sledzik’s ToughSledding and many of the 32 comments at Geoff Livingston’s Buzz Bin.  I got “egged on” with the recent posts about this subject. Check out these links, but watch out — the comments get heated!

I see PR under marketing from the direct report standpoint: For example, when have you seen a Director of Marketing reporting to a VP of PR? or VP of Advertising? or VP of Promotions?  Once in a while I see the PR function report in to the VP of Corporate Communications, who is probably responsible for the financial analysts relationships, SEC announcements and annual report.  Or the PR person may report to the VP of Human Resources if they are doing employee and community communications like videos, events and newsletters.  But almost of the time, PR is reporting to the VP of Marketing with the main goal to provide the 3rd leg to the 3 legged stool of PR, Advertising and Promotion.

I also see PR under the marketing budget.  For example, not an hour ago I received an email about an upcoming AAF meeting with a panel of major Cleveland marketing executives consisting of:

  • Judy Abelman of Avery Dennison
  • Peter Baka of Lincoln Electric
  • Rob Horton of ICI Paints
  • Tom Leibhardt of Moen
  • Rob Spademan of Cleveland State University

They will be answering questions about marketing topics such as: “How is your marketing budget allocated on a percentage basis? (e.g. advertising, PR, direct marketing, promotions, research, collateral, events, etc.)”

 So, at the risk annoying some, my vote today: Marketing leads, PR follows. Just my opinion.

(Sorry Bill, if you don’t want me to come be a guest speaker at your class anymore, I’ll understand.  But I really wish that someone had told me this when I was in school and I was believing everything that Ralph Darrow was telling us.)

Be Prepared. Plan for Trouble. Watch your Marketing Results Improve.

The weather  — tornados and avalanches across the country — has dominated the news this morning.  We’ve had so much rain here in NE Ohio, many people are dealing with floods.

Being prepared and knowing what to do makes a huge difference to the getting through it and the resulting outcome.

There’s a real analogy here with business.

Everyone who has ever done a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) knows that it’s inevitable that there will be ups and downs in the business cycle. 

Being prepared with your marketing program helps you weather any economic storm.

If you plan for them, you’ll be less intimidated when the downs come and be able to not over forecast with the ups.

Many businesses decide to cut the marketing budget when times are bad.  It’s one of the more “liquid” budgets.  (It’s much harder to sell a building, tell someone they are laid off, or return excess inventory that you are hoping you’ll need in a few months.)

Is that how it works in your industry? 

Or do you zig when others are zagging??

Other companies who have a plan in place that assumes if the competitors cut their marketing budget, there will be a lot less clutter reaching the target market.  When the economy starts to grow again, because we kept our marketing program in tact, we will cut our sales cycle in half. 

Why not put some contingency plans in your program so that you can continue with your marketing even when the economic storms are raging? Do you see a value in keeping up the communication with the target market when your competitors drop out?

Which philosophy does your business subscribe to? 

Being prepared for “the flood/tornado/avalanche” means you can back to business faster and turn the your lemons into lemonade quicker.