5 signs you are wasting your marketing dollars
There is plenty written on how to know if your marketing is working, but how do you know if you are wasting marketing dollars. And wouldn’t it be nice to know this before you spent it!!
I might be a bit brutal in this article, so apologies in advance, but it is highly likely if you run a small to medium enterprise in Australia that you are in fact wasting marketing dollars, and time left right and centre in your business.
How do I know this?
Because we’ve benchmarked more than 1200 business owners just like you, and having consulted for over 15 years in marketing to business like yours, I have a reasonably deep view of the situation.
1) No position – the first sign you are wasting marketing dollars is not having a market position. If you don’t know what your value proposition is, and you don’t know who your customers are, then you are most definitely wasting money. The reason is simple. If you’re not targeting a specific type of customer – your ideal customer – then you are promoting to no-one. And if you haven’t chosen a target audience, and decided what to say to them, your communication will not be expressed in the style, tone and terms that your audience will be able to receive and act on.
A value proposition and target audience gives you much more than knowledge of yourself and your customer. It gives you focus, clarity and the ability to communicate to that group of people on the issues they care about in relation to your product or service.
People make very different value calculations buying a cup of coffee to buying a house. They choose a medical professional differently to how they choose a lawn mowing service. And different types of customer act differently and communicate differently based on their age, sex, environment, upbringing, culture and other factors.
You simply cannot say one thing and expect a hundred different types of customer to react the same way.
2) No surveys – following on from this, if you are spending money marketing to your existing customers or prospects without having surveyed that audience, you may as well grab a fistful of dollars and burn them. The new five dollar note can double as a needle on a record player, so if you’re a fan of old vinyl – there’s probably a better use for it than spending it on marketing based on assumptions.
3) Talk wagging the dog – if you’ve decided to ‘do’ social media and put an ad in the paper or bought a package of online ‘coupons’ as your marketing based on the particular salesperson from that channel sending you a proposal – ba bum – cue the scary music.
Never put a vampire in charge of a blood bank – and never!!!!! – no matter how good the deal -take the advice of a salesperson for a media channel on what marketing channel to choose.
If you know your target audience, and you’ve surveyed their needs and wants, and you’ve piloted a similar campaign that worked in the past – go ahead. But don’ t let your choice of media be decided by a spur of the moment ad hoc deal that someone sent to you that was urgent to respond to, and you decided to do because after all – “it’s a little quiet this month and any marketing is good marketing right?” Nooooooooooooo! Stop!!
4) No measures – if you are about to spend money on a marketing idea, but you haven’t worked out how to measure it, or if you have spent money on a marketing program and then didn’t ask any new customers where they heard about you – then congratulations – you’ve been wasting money on your marketing.
Many, many years ago, I was asked to examine the marketing of a fairly large business who had a focus on TV advertising for their brands. Not only were they spending a lot of money, but one of the brand managers was insisting on running another campaign of exactly the same ads that had previously not been shown to drive sales. Oh and they hadn’t surveyed their customers for nine years!!!! Yes – it happens in big business too!
5) You don’t know where your client database is!!
This is the final nail in the coffin for many small to medium sized businesses in Australia. Over 40% of businesses in our surveys of over 10000 business owners – say they want new customers. And yet in benchmarking we found that less than 15% of businesses had promoted to their existing customers in the last 12 months. OMG! It is estimated that up to 90% of the future value of your business is locked up in your existing customers. Usually when a company says they need new customers it’s because they are hopeless at servicing existing customers and they are losing so many so quickly that they can’t make money. An existing customer is 6-8 times less expensive to promote to; so if you’re spending most of your marketing dollar trying to attract new customers – then you are spending 6-8 times more per new customer. And you may not need to.
I hope this short article helps you identify some of the ways you might be wasting your marketing dollar.
Good luck investing your budget more wisely in the future.
Have a good day