I attended a roundtable discussion yesterday evening organised by the Prague-based International Business Forum (IBF) on the subject of marketing, and especially marketing on a low budget. Low marketing budgets, unfortunately, abound when it comes to the members of the IBF, since most of us are small business owners.
The roundtable was led by the excellent Jo Weaver of JWA. Her theme was that marketing is as essential for most companies as desks, chairs, PCs, and telephones. (Actually, in my view, desks and chairs aren’t essential.) Marketing can be a website, a business card, a dinner with clients or prospects, a newsletter, a battery of telesales agents, a seminar, an advertisement, a Facebook Page, an article on LinkedIn, a well-crafted press release, a commissioned PR article, or a blog (such as this). She pointed out that the large multinational fast moving consumer goods companies (such as Coca Cola, Procter and Gamble, and Unilever) spend up to 20% of their revenue on marketing. And when times get tough they spend more, not less.
Most of us in the room, as Jo pointed out, run or own small businesses, and small companies, unless they’re directed from abroad by larger headquarters offices, are reluctant to spend money on marketing. We’re also inclined to think we can do it ourselves without professional help, and we approach the task without forethought, without consistency, and expect immediate results.
All of this is true. Every company must spend time and money on marketing. Not, in most of our cases, since we’re not selling consumer goods, 20% of our revenue, but probably more than we’re in the habit of spending. Many of us trust to ‘word of mouth’, but that is marketing, too, and we should work hard to make sure that the ‘words of mouth’ that get bandied about are the right ones.
Most of us in the room were also at the helm of companies selling to niche markets, and the larger amongst us have tried marketing of many kinds. My company, LLP Group, resells and develops business software, and provides consulting services to international organisations in Europe and North America. How to reach our market? And where? In the countries in which we have our offices, or in the capitals where our potential clients’ headquarters are based?
And how? Website, obviously (we have four, aimed at different segments of the market), Facebook pages, LinkedIn groups, blogs, Google AdWords campaigns occasionally, sometimes telesales, and so on. Even over many months or years, these have achieved marginal results (or, looking at it another way, they have kept us in business). We might spend more money if we knew how or where it would be effective. Or should we realise that our markets are small and that we are reaching them as effectively as we can? One of yesterday’s participants stressed the need for measurement. He made some good points, but how do you measure the effectiveness with which you are reaching potential customers if your market is a niche market? It’s not obvious.
But there are many easy mistakes to make in marketing, and I always find myself telling a story about our early days in Romania, when our amiable but ultimately crazy managing director (so possessive was he of our subsidiary in Bucharest that eventually he stopped doing what he was told and we had to fire him) complained incessantly that we weren’t allowing him to spend enough on marketing SunSystems.
‘Look,’ he said, as we travelled through the city in his vast and vulgar limousine, ‘our competitor, Scala, has advertisements on every lamppost. Every taxi driver knows about Scala.’
‘And how many taxi drivers are looking for international financial software?’ I asked.
It’s easy to spend too little on marketing. We should all spend more, and we must accept that we will never be entirely sure as to how much of our money is wasted and how much is effective. But one thing is certain – market towards your customers – and if your customers aren’t taxi drivers, don’t waste money on telling them a single thing about your products.