Marketing versus money making

[toastdesign]

I'd be interesting in hearing any thoughts on the question of marketing. For many small businesses, making money is the prime directive, but what of the activities that don't DIRECTLY result in an invoice, such as marketing - we all know that no marketing = no new business, but as small companies, how do we delegatge who does it? . Is it ok for one member of a small team to not make any money, but do the marketing - hopefully getting in more work, but also putting more pressure on those doing the paid work?

Large companies can afford to have marketing departments, but can the small business? Or in a small business, should marketing be the responsability of all the key partners/directors/founders or seen as something that one person should do, therefore being released from other activities?

Small companies need to make money, but SMEs can also get EXTREMELY busy - I guess what I am saying is is marketing a viable reason to avoid doing paid work in a small company?

I look forward to responses!

David Foreman
Toast Design.

[pressd]

Large companies can afford to have marketing departments, but can the small business?

There are affordable and professional marketing services available to small businesses - thanks to the internet! They can often work out cheaper than using your own time to coble together the skills and resources.

[BIZAL]

i.e. BIZAL

[Owl]

With respect, I think you need to redifine in your own mind what marketing really is...

Many people think as you do that marketing is a cost and something that you have a budget for... This includes many large corporates.

But when you think about it - having a marketing budget that is - it's a little bit preposterous... Here's why:

If you have a marketing budget of say £5,000 and you spend it on a series of ads and they produce £7,500, would you stop because the budget got used up? Ridiculous isn't it? But many do because they have no way of measuring or testing how well their advertising (or marketing) is doing.

The rule is this: Every bit of 'marketing' you do should produce a measurable financial return so that you know what works and what doesn't. The way to do this is to track your marketing.

One more thing... Make sure you ask every enquirer, prospect or customer where they heard about you from. Then you'll know where to spend your marketing money.

All the best.

[Corabar Entertainment]

Originally Posted by Owl

If you have a marketing budget of say £5,000 and you spend it on a series of ads and they produce £7,500, would you stop because the budget got used up?

Probably, because if I had to spend £5,000 on marketing to get £7,500 worth of business, we'd be bankrupt once I'd paid all the other expenses!

But I know what you are trying to say. However, you have to think what a 'budget' is. It is really only a plan - as is a 'target'. Neither are absolute figures, so if part of your marketing budget was used on a particular marketing campaign which produced good results, your sales target would be exceeded - therefore you would have additional money available to funnel towards your marketing budget and could continue to spend on the particular marketing campaign which was paying off.

The problems really arise when you have used your marketing budget on campaigns which do not work. In this case, what do you do once you've used you budget? Give up marketing for the rest of the financial year? Continue throwing money into the budget by 'robbing Peter to pay Paul' in the hope that the next campaign will be the one that will produce good leads?

"Cost-effective marketing" is a phrase which is banded about quite liberally, but until you have tried something, you do not know whether it will work - everyone selling marketing services of any kind will claim that their service is just what you need, but I have yet to find any that will give you a guarantee, or offer you your money back if it doesn't pay off!!!!!

[Owl]

You make some good points...

It's the age old question... As David Olgivy quoted someone as saying: 'Only half my advertising works, trouble is, I don't know which half' or something like that.

Obviously to have a marketing budget you need some money. If you've blown it all on stuff that doesn't work then you have to think of alternatives (more about that another time)

Thing is to use your marketing money by testing. Try a bit at a time so that you don't empty the piggy bank.

'Cost effective advertising' is a reality and sometimes it doesn't have to cost. There are lots of ways to market yourself that either costs nothing, such as joint ventures (and yes they can be done by the small guy too) to low cost stuff such as classified ads that use a 2 or 3 step approach to the sale... That way they cost very little and qualify people along the way.

Hope this helps.

[Inzvestor]

Every person in the company should be encouraged to market the product/company/company values at all times.

In a small company it is the teamwork that helps a business stay afloat and expand.

Unless you can afford to have a dedicated marketing person, write this role into each partner/current employees job description.

Allocate a certain amount of time to this function and encourage teamwork, as that achieves much better results than the action of 1 person alone.

[Corabar Entertainment]

Originally Posted by Inzvestor

Every person in the company should be encouraged to market the product/company/company values at all times.

Whilst I agree to a degree.... I have worked for a company where every member of staff was expected to 'market' and was given a target of x number of marketing hours per month, which proved incredibly ineffectual and did little more than build resentment from the staff who did not feel they were in a position to market the firm in general.

If a member of staff is happy in their job, they will always recommend the services of the company they work for whenever a situation arises or when a friend/relative/acquaintance requires the services provided by the company they work for; but (especially if you are looking at B2B marketing) in all honesty, it is only those persons within a company of a certain standing who are able to truly market the company to an outside party and be taken seriously.

[JDevic]

Small business marketing must be very focused.
From my experience, we often try to make our clients impressed by web design site, logo, promotional cd... The main goal was never achieved and we spended a lot.

[toastdesign]

Originally Posted by Owl

...you have a marketing budget of say £5,000 and you spend it on a series of ads and they produce £7,500, would you stop because the budget got used up?...

I agree. Trying to define a *budget* as such for marketing is a false ecomony. It poses an interesting problem, but asking EVERYONE where they heard of your company is a good idea, and working for us. Google Adwords are proving to be very successful, and we've made a tidy sum as a result of a hanging sign on the exterior of our building!

Thanks for the posts to this thread. Interesting reading.

dave
Toast