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You gotta spend money to make money!

Yesterday I was speaking to a client that had just returned from a long business trip where, he said, he had spent a small fortune on entertaining clients, amongst other things, and the end result was one very nice new piece of business and a handful of potential projects. The total cost, he said, was far out-weighed by the value of the one confirmed piece of business, and if some of the other projects came off then the whole trip could be regarded as a huge success.  “Ah ha,” I said, “that is exactly what I keep banging on about – if you get back more than you spend on any marketing activity, then where is the downside?!”

As an agency, we have had numerous discussions with clients over the past few years who want to cut back or stop any form of marketing – even the biggest companies in the world have reduced their advertising and PR budgets significantly.  But every time we have this discussion (and trust me, I know how difficult it is to spend money when you don’t really have any…!), I ask them how they plan to build their businesses back to where they were before the economic crisis if they don’t do any form of marketing activity – which they are not usually able to answer.

At this point, I should mention a quote that I saw one time by the CEO of one of the big FMCG goods companies a few years ago, who said “I love a recession – I can guarantee that all of our competitors will stop their marketing, whilst we will be increasing ours.  And the result of that will be that we will not only maintain the business that we already have, but take over a lot of theirs as well”…   Or words to that effect.

Of course it is easy to say that when you are running a huge empire with a large amount of money in the bank!   But if you are trying to keep costs as low as possible, and you have no real budget available, it is very difficult to take a risk and spend what you don’t have on something that is not guaranteed to work.   But then… if you don’t do anything, and your competitors start to increase their own marketing activity, you might end up with no business at all.  So what to do?  

I have talked before about the various marketing activities that you can do without spending very much – and maybe some of you have tried a few of these ideas and have seen a bit of improvement.  But, generally, to get really significant results, you have to spend more than just a few crowns.

What we are seeing now is that there are companies that are prepared to invest into marketing, so now we are busy persuading those companies that they should not give this budget to their tea lady or junior assistant to use – if that is where you are now, please treat this budget as you would your accounting, legal affairs, building work or any other professional service, and use someone that is trained and has experience in marketing. Otherwise you, too, will join the ranks of those that think that marketing doesn’t work.

Finding that person is not always that easy, so in the next blog I will discuss the differences between in-house and external marketing people, and what you can expect.

More then!


About the Author: Jo Weaver is the Managing Director  at JWA Prague s.r.o. (www.jwa.cz)  

 
 
 
 
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