The various musings of Michael Hiles

DANGER! Avoid these two destructive approaches to your marketing

Through the years, I’ve worked with a lot of clients. All of them were trying to figure out the magic bullet solution to market and sell. Two common themes can be found in almost every business marketing organization that drive the overall efforts. Both of these themes are big problems, and in the modern era of metric-driven decision-making, are becoming big obstacles for businesses to overcome.

#1 Marketing Budget As A Percentage Of Sales

Prior to the digital era, attaching outcomes to actions in marketing were difficult. Marketing spend was seen as a sunk cost… necessary to a certain degree, but not really any direct, measurable connection between the dollars spent to the effectiveness of the lead generation and sales. Business leadership simply determined a budget based on the percentage of sales of the previous year contrasted against what the expected revenue would be for the coming year.

In a conservative year, maybe an allocation of 5% of sales would be spent. In aggressive years, management could decide to go hard and spend 10%, 15%, or even 20% of sales in a marketing budget. Again, no real science or data-driven methodology to determine the budget.

With this approach to budgeting, the marketing calendar is typically planned annually based on the budget that’s allocated. Key promotions, media buys, and trade events are identified, planned, and executed against that calendar within the allocated budget.

#2 The Big Idea Approach

The second recurring theme I’ve seen over and over is “The Big Idea”.

The Big Idea crosses industry, and can found in businesses of all sizes. It’s what drives most marketing and lead generation efforts.

While marketing itself is presently going through radical disruption – especially with the advent of software and social media, marketing management hasn’t changed much since the beginning of business.

Most marketing campaigns are event-driven, and/or based on some big media purchase with the associated deadlines attached. This forces marketing activity into a project-driven approach. There’s some end date looming, and all the creative tasks and activities must be coordinated to arrive at that deadline perfectly.

This may be the decision to attend the Big Global Schmoozefest Trade Show, which occurs on a specific date. The marketing team has to do all the things necessary to present the company with it’s services and products at the trade show event.

This means booth design, graphics, printing, hospitality suite, catering, t-shirts, spiff giveaways, etc… You know, all the good stuff that goes into ensuring the company puts its best foot forward to engage prospects on the floor during the event.

The Big Idea may also be a big promotional media campaign. You see this in big agencies in particular, the Don Draper creative director pitches a big concept around a coordinated media campaign, and the client decides whether or not The Big Idea will resonate with their prospective customer base and audience or not.

Then when the decision is made, all the creative efforts must take place to produce design, copy, imagery, print ads, radio spots, television commercials, etc… to meet the publishing or broadcast calendar deadlines.

The Resulting Downstream Problems

There exists a series of problems that come with both of these two common themes.

1. Disconnect between money invested to sales outcomes

With all the emerging marketing and ad tech, metrics and data analytics have presented the opportunity to connect promotion, content, and messaging to customer behavior and sales outcomes. Yet, most organizations are just starting to invest in a few tools here and there. Unfortunately, because it’s software and data, the complexity of automating an entire marketing and sales process is very high – and there’s still a huge disconnect between IT organizations, marketing, and sales. So it’s a big challenge for companies to truly know things like the true value of a social media fan, the effect on sales readiness of blogging, and so on.

2. Inability to adapt to rapid market trends

When it comes to planning marketing a year in advance due to the budget method, it doesn’t leave the business room to pivot quickly when market trends emerge. In fact, this is where larger companies get locked into the bureaucracy of being monolithic organizations, unable to adapt and change in the market. This leaves companies at a competitive disadvantage when a new market trend can emerge rapidly inside of a few weeks. This is the internet era, where communication goes global on an instantaneous basis. Yet, communication planning in most businesses cannot adapt to these shifts in time to capture the opportunity.

3. Project-driven campaigns spend all the money before the outcome is realized

When treating marketing campaigns as The Big Idea projects, the investment is generally pretty big and the money is entirely spent before the outcome can be gauged as a success, or more often than not, a failure. The new re-branding effort fails to resonate with the audience. The trade show didn’t generate the sales-ready leads. The television campaign didn’t create a lift in sales.

The money was spent much like betting at the roulette wheel in Las Vegas. You plunked all the chips down and the marble lands on your number or color – or it doesn’t.

It sucks really bad when it doesn’t.

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