Managing Your Marketing Risk For Greater Returns
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All marketing carries some level of risk: There are no certainties that a particular campaign, price point, brand design, channel choice or any other aspect of marketing will produce the forecast results.
Starting a new venture or entering a new market can be very costly and risky. It’s a bit like entrepreneurship; inherently uncertain with some level of risk, and the possibility of great reward.
Business is all about marketing
Entrepreneurship is about marketing. If you make sales, you generate profit and cash, and that means you can buy the services you need.
However, without sales all the finance and all the skills and mentoring in the world will not help you to succeed.
Gaining access to markets means you have to make prospective customers aware of your products, and they must be persuaded to at least consider taking you on as a supplier.
These are classic marketing challenges; getting known by the right audience and getting them interested in your products and services. The question is where to start, and how much should you commit?
Start by setting the right goals
The starting point is to set your goals. Marketing promotions can be divided into brand development, sales lead generation, sales tools and customer retention and growth.
Decide what proportion of your total budget you want to spend in each area, then set specific and measurable goals. Be cautious of vanity marketing; fuzzy ‘show the flag’ promotions, with no clear and measurable objectives can cost a lot and produce limited returns.
Once you have set your goals you should think about the answer to this question: “Why would customers buy from me?”
A meaningful answer would include showing what value for money you deliver (your value proposition) and the unique or rare attributes your business offers.
Base all of your marketing messages around these answers. Review your answers regularly: We live in a fast-changing world.
Customers are interested in outcomes that your products and services generate; actual products and services are just a part of the mix, so do not focus on them.
Make extensive use of ratings, referrals testimonials and case studies. Potential buyers are cynical, they place far more weight on what your customers say about you than what you say about yourself.
Measure your outcomes
Measure the outcomes of every campaign and compare outcomes to your planned results. Outcomes are easily measured in sales lead generation or customer retention campaigns.
It’s harder to measure brand recognition, understanding of brand messages and brand position. You may have to do some research.
Related: Decrease Risk And Increase Options
Focus on digital but include other activities, for instance networking could be a part of lead generation. Writing a book or a blog is great for enhancing your brand.
Price can be one of your most effective marketing tools, especially when linked to lead generation.
Managing your risk
There are a few areas that are high risk. One-off advertising, usually as a result of somebody offering you a very special price for last minute ad space is one example.
Stop and think; if the offer is really that good, why is it not being snapped up by big agencies or corporates?
Another high-cost low-return expense is on elaborate printed brochures. In this electronic age, most customers have too much paper, and would rather you use digital.
Spending money on websites that do not produce outcomes, poorly targeted click through campaigns, attending networking events where there are no buyers, only sellers and any form of untargeted marketing are all wasteful and time consuming.
Pulling it all together
None of the above are ironclad rules, some of the apparently worst ideas work for some companies and equally following all the good advice does not guarantee success.
Like entrepreneurship, marketing is inherently a risky and uncertain business. But it is tough enough prospering in business today, without wasting money and time that could have been better spent.
It makes sense to manage your marketing with the same discipline you manage the rest of your business.