When is the best time for a business to spend money on marketing?
Without question, forking out piles of dough on marketing won’t help a compromised product. You can’t simply market your way out of lackluster customer experience. In fact, attempts to do so may hasten a product’s demise by drawing attention to something that isn’t ready for prime time. Marketing is not that kind of magic.
Where marketing magic does come into play is when the company already has a product or service that offers a quality experience, and you’re ready to give that solid product a leg up. You’ve heard that the best marketing is word of mouth. And by word of mouth I don’t mean viral marketing or clever interactive company/agency content (though that kind of thing has its place). I mean real, actual, bona fide, happy customers endorsing your product or service to others who may, in turn, become customers. Evidence of this may take the form of online posts and reviews, shares, likes and such. That’s all nice anecdotal stuff. But you’ll know for sure when your top line moves steadily up and to the right.
Don’t ramp up marketing until you have an honest-to-goodness value proposition and the proof to back it up. Then promote the heck out of that point-of-difference, and anything you can that supports it. You don’t even have to be the best at what you do. Heck, Avis is still known for its ad campaign from the 1960s, “We Try Harder,” in which it embraced its number two spot in the market by positioning itself as an underdog, which in turn made you want to root for it. It was so effective it ran for several years and is still part of the company’s mission today. But that Doyle Dane Bernbach campaign only works if Avis already offers a product that delivers on expectations when compared to the #1 company in the category. Otherwise, it’s just an invitation to feel sorry for a poor, substandard company before going back to the one that delivers on its promise.
Real life case in point. I own a small business that sells retail products and services. I have reduced my marketing spend 25 percent over four years and my top line has grown 15 percent in a rather stagnant category. How? I improved our service quality by investing in staff, training, and systems, and honed my spend to focus as narrowly as possible on my target demographic. The result was that I was able to attract more of the right customers while providing a better customer experience. Looking back, it didn’t make sense to spend as much as I did on marketing when the retail experience that customers had known under prior ownership was lacking. From now on, I will only increase my spend in proportion to rising profitability because if spending money on marketing – traditional advertising, digital, social, events, whatever — does nothing to help me put more money in my pocket, why do it?
What do you do if you have a great offering, great word of mouth, a proven track record, a steadily growing bottom line, and you want to take it to the next level? It might be time to ramp up spending. Find elements of your business that use the success you’ve forged as a jumping-off point for creative development. Use customer endorsements to establish a brand promise and create marketing programs that share stories and engage potential customers based on the truth of your promise. If you’re too immersed in the daily demands of the business to assess its best marketing angles objectively, hire a good strategist to help.
But don’t spend on those things before it makes sense. Promote developments along your growth path, absolutely. But save most of your powder to make a big bang when you have proof of concept and can deliver an offering customers will genuinely love.