(Note: This post was first published in the Morgan County Business Leader)
As a marketing consultant for Indianapolis small businesses, I recognize the need to “get the most bang for the buck” when it comes to marketing and promoting your company. This is particularly true in the start-up phases of a business, or when sales are slow during today’s tight economic times. But I want to caution all of the business owners that, when striving to cut their marketing budgets, make a fatal error that could cost their business thousands of dollars or more in lost revenue.
Thinking of cutting marketing costs?Beware of the consequences before you begin.
Let me explain. So, you’re launching a new business, and you have limited funds to get your business going. You need a new company name, logo, tagline, printed marketing materials and a new website. Instead of taking the time to find an expert in naming/branding/logo development, you use one of those low-cost, online deals that gives you a logo for a hundred bucks, along with 500 free business cards. Why do I have a problem with this method? Because your brand is a lasting component of your business. It is the first impression customers see – a reflection of your company and personality – and it should be created for longevity. Skimping in this area can be dangerous because you may be showing your customers that you don’t care enough about your own product or service to showcase it effectively. You may lose customers because they don’t perceive you as professional. And more importantly, you will likely have to re-brand yourself later, and spend funds to re-do your new materials to match. So why not do it right the first time? You don’t need to spend thousands, but plan to spend several hundred or a few thousand dollars on a new brand and materials for a new business brand or re-branding effort. Trust me – it’s well worth the investment.
Another one of the most common errors that I see business owners make is not taking the time to properly prepare their marketing strategy – whether it’s a plan for a startup business or an annual plan for an existing business. It’s easy for business owners to cut corners on this one, because there are so many options out there for marketing and advertising your business. In fact, the options are so limitless that many companies will use an approach that I call shotgun marketing – which is, to just pick and choose which marketing and advertising tactics seem good at the time, without taking into consideration the cost versus target market reach, etc. I have witness companies waste thousands of dollars on the wrong tactics, only to go out of business or get no return on their marketing investment. Don’t be a casualty of shotgun marketing. Take the time to create a marketing strategy that analyzes your industry, competition, advertising options, and budget, and develop the right, integrated mix of strategies that work best for your business. And don’t forget to refine this periodically to adjust for change.
Finally, a third way I’ve seen companies skimp these days is on their corporate websites. I’ve seen both startups and existing small businesses commit this grave sin. A company signs up for web hosting and uses the hosting provider’s package deal, which comes with a “customized” web template for only $20/mo. Or they hire one of their employee’s cousins who is a recent college graduate to develop the website for them for a small fee. The problem I have with this cost-cutting move is that for a small additional investment, you could have a website professionally designed, written and search-engine optimized, complete with a blog, links to your social media accounts, web signup form , e-newsletter, and more. Similar to my point on skimping on your company’s brand, your website has the capability to drive prospective customers to your business, so you don’t want to give them a bad first impression. In addition, if your website is not properly optimized for search engine visibility (which is more than just submitting it to Google to be “listed”), you risk losing hundreds of potential customers. How much is one customer worth to you in lifetime value? Spending a few thousands of dollars to develop a nice looking, professionally-written website will go a long way in attracting customers and creating a good impression before the sale. This is also true of a company’s social media sites, where I see companies hiring “interns” to manage the company’s social media pages. Again – first impressions count, so beware of who you hire to create that impression.
In this economy of save-more, spend-less attitudes, business owners need to wake up to the fact that cost-cutting your marketing efforts can negatively impact future sales. For greater success, business owners need to spend smarter with a marketing strategy that maximizes results, with a professional brand and Internet presence that outshines the competition.