By Matt Brown, firstname.lastname@example.org
Sales are below budget, profits are under pressure and the finance people want to reduce costs. Stop spending money on marketing – instant cash savings and no short term damage, right? The marketer will of course have a different view. To protect their position, the marketer will wish to continue to spend, after all they understand that if the business is experiencing a challenging sales environment, cutting expenditure, resulting in talking to fewer people, is not going improve the situation.
Now, if we change the perception and consider marketing for the moment as an investment, then the expenditure has a different purpose. After all, when we make an investment we expect a return. This ROI (return-on-investment) will be understood by the finance person. They will be looking at what return can be expected from each Pound spent (the expenditure again), but so should the marketer.
You may not always be able to identify exactly how many Pounds of business have resulted from each Pound of marketing spend, because the sales lead-time may be long and a number of marketing activities may contribute to the sale. But you should have a clear picture of how each marketing expenditure will be judged to be successful.
Think ROI and demand that each activity makes money: sharpen your thinking. If you are not able to determine the value that a particular activity is bringing to your business – why are you doing it? Set clear objectives for each marketing activity and make sure you measure results against expectations. If you cannot measure the outcome of an activity – why are you doing it? What impact on sales would doubling or halving your investment on this activity have? Don’t know? Then why are you doing it?
Only by setting clear objectives and utilising robust tracking measures can you possibly make intelligent decisions to improve your marketing performance.