by admin | Mar 22, 2011 | Blog, Strategy
If we accept the notion by the grandfather of modern management, Peter Drucker, that “Business is about two things and two things only, innovation and marketing” and that people are in fact our greatest assets, then it would make perfect sense to deduce that your company’s marketing consultants are your most important and valuable assets. So much for theory, the stark reality of marketing as a discipline and a profession in the small business arena is quiet different.
Why is it so? Because unfortunately, for most small and medium sized businesses, marketing is an expense and not an investment. Most small business owners do not understand the meaning of marketing or branding let alone have any basic understanding of advertising principles to effectively and efficiently reach their target audience. Hence much of the small business marketing efforts are wasted and as proof all you have to do is to open your local paper, look into your mailbox or jump online and that’s just in the consumer space, the business to business and professional categories are even worse!
But this is not another article pointing out the shortcomings of marketing by small business owners. We’ll focus on those entrepreneurs who understand the importance of marketing for the success of their business. The 8% (PWC survey “Private Business Barometer IV”) who didn’t nominate the slashing of their marketing budget as a coping strategy during the Global Financial Crisis; the 8% who know their history and understand the importance of maintaining or even increasing marketing investment in a weak economy. They know that competitors tend to cut spending during a recession thus creating opportunities and that maintaining promotional spend during tough economic times will sustain or even grow their market share.
Yes, we are talking to you, you the minority who carry the hope of all small business owners and it is for you, that we write this guide on how to get the most out of your marketing resources – your human marketing resources.
You who would never dream of appointing your personal assistant to the position of Marketing Coordinator or Manager! You would never promote an engineering professional to the position of Marketing Director or make the HR person responsible for marketing your professional services firm! Sounds crazy right? No-one in their right mind, with any understanding of the marketing profession (noun, a vocation requiring knowledge of some department of learning or science) would ever do this? Unfortunately it happens every day, so we won’t waste precious space on the CEO’s, MD’s, GM’s and business owners who allow this to occur. We’ll focus on those who understand and appreciate the importance of professional marketing in their business, where maybe our message and advice will do some good and not fall on deaf ears.
So you have come to a realisation, a point in your business when you recognise, unlike 92% of your small business counterparts, that most people couldn’t walk in off the street and run your business, so you do not expect to somehow be an expert when it comes to marketing.
So, where to from here? You have 2 choices; to outsource your marketing services or employ a marketing professional.
[download id=”1″ format=”3″]
by admin | Jan 7, 2011 | Blog, Promotion
A 2008 PwC survey, “Private Business Barometer IV” paints a depressing yet realistic picture of the Australian small business state of play – about 92% considered cutting their marketing budget. Gregory Will, partner at PwC, rightly points out that these are the very areas that are the source of most small businesses’ competitive advantage. 3 years on and nothing much has changed!
The reality seems to be that we’ve gone from riding on a sheep’s back to acting like them at a time when we need leaders, not followers!
You can call farmers “battlers”, but not the majority of SME business owners – their droughts are mostly self inflicted. The following is a statistic I found on the CPA Australia website – 3 years ago – and it estimated that one in three new small businesses in Australia fail in their first year of operation, 2 out of 4 by the end of the second year, and 3 out of 4 by the fifth year, with only approximately 8% of small businesses succeeding beyond five years.
Failure to plan is a plan for failure
Conducting a business without a formalised plan is much like trying to drive a car to an unknown destination without a map. Yet the estimates are that only 3% to 5% of Australian small businesses starting from scratch prepare a business and marketing plan; that is, know that their business is feasible and have a formal plan to steer that business towards success. Based on the fact that a Feasibility Study, a SWOT Analysis and a Marketing Plan are a part of any Business Plan, I suggest that approximately 70% of all business failures and almost 100% of lack of business growth are due to inadequate Marketing.
Peter Drucker, the grandfather of modern management said business is about 2 things and 2 things only – innovation and marketing! A number of studies conducted since WWII showed something that marketers have known all along – keep marketing through the downturn. The following quote is from Professional Marketing, Oct-Dec 2008 – article titled “All Hands On Deck”: “…companies that increased marketing spend (relative to market size) during a recession, increased their return on capital employed by 5% in the recovery, compared to a 1% decline for the budget cutters”
Most businesses are either ignorant or choose to ignore the empirical evidence for maintaining or even increasing marketing investment in a weak economy
– Competitors tend to cut spending, creating opportunities
– Maintaining promotional spend will sustain or even grow market share
– Stealing share of mind is a bargain during a recession
– Consumers don’t “go away” during a recession, they become more conservative
For most SME’s marketing is an expense and not an investment.
Most SME business owners do not understand the meaning of marketing or branding let alone have any basic understanding of advertising principles to effectively and efficiently reach their target audience. Much of the SME marketing efforts are wasted anyway – just open your local paper, look into your mailbox and see the standard or the lack of it in SME marketing communication. Only a few weeks ago the ABS released a frightening statistic that 66% of Australian businesses do not have a website!
Attitudes have to change
“Ego and advanced ignorance have killed many a business, and continue to do so. …ignorance is acceptable because it means we don’t know. Advanced ignorance, however, is ‘knowing we don’t know’ and doing nothing about it! It’s deadly….there’s information readily available on every conceivable issue relevant to growing a healthier business, but it’s far easier not to seek anything at all.” Says Brett Lowe of Business Planning Works.
There are businesses still around today, that perceive customer service to be a “Thank You” on the invoice
A study of 460 B2B organizations that employed 100+ people, conducted by Strike Force Sales, found that only 6% of Australian companies pick up the phone and respond to a web generated sales inquiry with a phone call. The MD of the company, Chris Moriarty brings this reality home with another statistic that shows 46% of the time auto-response emails are never followed up.
In the last 5 years, I have met hundreds of SME proprietors and completed over 70 SME marketing projects. I have discussed the SME challenges with colleagues and other consulting professionals and have to say that there are glimmers of hope. These generally lie with the younger more entrepreneurial SME business owners who have grown up on the ‘brand rich media diet’.
There is plenty of professional help out there, admitting you need it, is the hard part…
Recent Comments