TEN BIGGEST MISTAKES I SEE MY CLIENTS MAKING* 02. TO SPEND OR NOT TO SPEND; IS THAT A QUESTION?

As still in Q4, the first few thoughts in this series are more heavily weighted towards the marketing side of things. It’s unlikely you’re in the position to simultaneously consider brand equity whilst in the throws. And forget doing any diagnosis/research now to impact FY25.

And so, let’s get down to budget.

Three familiar statements from life pre and present-consultancy:

1.     “Profit margins are super tight. What’s the least amount of marketing spend we can get away with?”

Marketing underspend may look like you’ve saved money. It may also mean you’ve lost revenue. If your brand isn’t visible during awareness, evaluation,  purchase, or loyalty opportunities, you’ve lost a relationship, a sale, a loyal customer and a word-of-mouth referral. The longer you invest in marketing, the better you’ll be able to gauge what is a good return for your size of business, your industry and the type of profit you’re aiming for. In the interim, a good rule of thumb is (READY?) anywhere from 10 – 20% of projected revenue; the former to sustain, the latter for aggressive growth.

2.     “We’ve been doing this for 20 years without any marketing. Why do we need it now?”

So many reasons…! Loss of market, loss of voice, getting left behind with new competitors, customer behaviour changes, and shifting trends. Not least: lack of product evolution, pricing adjustments, avoiding the commodification of your brand, and losing brand equity. Marketing can help steer: product, pricing, promotion and place. Frankly, you either had someone on your team with a natural know-how, or you likely lost out on potential growth, revenue, strategic advantage, and opportunities that required a long-term, focused investment.

3.     And my personal favourite… “I’ve been told we should be getting at least £1 back for every £1 or marketing budget spent across all channels.”

Yes, and if you build it, they will come.

(Sorry, that’s a lie.)

Good news and bad news. The bad news is there will be some situations where financial ROI is unmeasurable. I appreciate this is particularly difficult for SMEs and extremely tight budgets. The good news is there are some channels that offer a return greater than 1:1. The balance is not in the hunt of the latter alone, but in the balance of both as both deliver in different ways. It hurts to spend money and not see instant return, but there is an element of trusting the process, trusting your marketer, establishing a strategy-aligned set of goals, and measuring performance regularly. Read more about the balance of the long and short here.

Hope you found this helpful. I’d love to hear your thoughts.

*A ten-part, snappy 500-word series to help identify the ten biggest mistakes I see MDs, Founders, and CEOs of SMEs making when it comes to strategic brand and marketing.