Yesterday morning, on a beautiful spring Good Friday, I took Kashi for a walk in the official federal-government owned dog park in our backyard. As the dogs jumped, played, and sniffed around (and mine dug a big hole), I chatted with my neighbour who happens to be responsible for marketing for a major Canadian retailer. This person works with budgets which would blow me (and most of us) away and reads everything he can find on the topic. Of course, he can also hire and contract with the best experts in the business, attend major conferences,and everyone with retail advertising to sell would like to know him well.
I asked him about the expense and risk of trying new things and he gave me an answer, initially shocking, but then rather obvious. ?Oh, there isn?t much risk at all,? he said. ?We just test.?
If you are spending a few million on marketing, testing is a cinch, of course. You try something new with enough volume to achieve (based on prior experience) some measurable results, and see if the change affects your return. If it works, you add it to your repertoire. If it doesn?t, you move on.
He is trying a viral campaign right now. The cost is so low (for him) he doesn?t need to get any kind of management approval or authority to say ?yes? to the initiative ? but it would be a major project for most readers of this blog
This attitude is pervasive among the minority of us who really market extensively. One reader reported on the Remodelcrazy.com forum that he has just tried post-it notes on his local newspaper?s front cover. The campaign cost $1,600.00 He received a few worthy leads and commitments (somewhat disappointed but still a worthy return) but the $1,600 expense doesn?t bother him because he advertises regularly and frequently. He likes print media.
So do our largest advertisers for Ottawa Renovates! Their budget with us is a drop in the bucket of their overall marketing resources but they spend orders of magnitude greater funds than most in the business. Some of the successful marketers are popular with their peers; others are distated. They share a common perception and value that money spent on advertising isn?t wasted. They try new things, of course, but commit to ongoing strategies.
Then there are the majority of us, who have managed to stay in business by building a great reputation. Referral and repeat business drive us forward and (too many of us) simply rely on this business to get our phones to ring. The passive referral and repeat business is the most enjoyable type of business you can get. It requires virtually no marketing expense and you can maintain your margins. Besides, it feels good.
Still, the businesses which spend money on marketing and advertising, who try new things and innovate, seem to do relatively well in hard times as well as good. But every time you spend your money on marketing, if you are like the majority, you seem to get burned. The campaigns just don?t work the way the salespeople claim. Results are dissatisfying so you stop, until someone sells you another magic solution, only to be defeated again.
I?m not sure how many media reps and advertising gimmicks are sold to my neighbour but I?m sure he receives many pitches. He can handle them simply. If they are worthy of consideration, he simply slots in a test. The expense may be a few thousand dollars, but the real cost is a drop in his marketing budget.
Obviously a $2,000 test for someone with a few million to spend is a whole lot less risky than a $2,000 campaign for someone who has never spent a cent on marketing outside of some crudely printed business cards. The question is: How do you cross the chasm and achieve some success when (a) you don?t have a huge marketing budget and (b) you know in advance that most of the things you will try will fail unless you are exceptionally lucky (or if they are successful, they aren?t blow-it-away successes.)
Systematizing and encouraging (rather than relying) on referral and repeat business is your first and essential marketing strategy;
Associations (both business to business and community/special interest) provide you the best potential return on your marketing investment but you must learn patience
Learn from non-competitive peers and your existing clients what works and what doesn?t (as best you can) before testing.
Set a budget through an annual planning process. Keep your revenue projections reasonable (very low for untried ideas) but use your budget and plan as a guideline to deal with the marketing reps who will undoubtedly call you.
Crossing the great divide isn?t easy because you need to change your thought processes about marketing and be willing and comfortable in risking failure as you try new ideas out. Probably your return on investment for the testing will be dismal, but the good news is, after enough testing you will know what works and what doesn?t and you will have a baseline to work from. In any case you still don?t need to spend a fortune to get started.