It can be tempting for business owners to resist investing money in marketing, especially in their company’s early days. After all, cash is tight with capital tied up in startup and inventory costs, and revenue still a long way from coming in. That said, marketing is just as-if not more-an essential expense as any other initial business investment. If deployed thoughtfully, it will generate fantastic ROI. That may seem hard to envision in the early, struggling days of a new business, or for a business that needs to boost its sales or buck negative trends. Here are some key ways marketing dollars can pay off.
Marketing Builds Awareness
Picture this: you’ve bought the perfect location for a new restaurant, hired a great chef and waitstaff, decorated it beautifully, and are ready to open. That’s all wonderful, but without including marketing in the building process, it’s possible that no-one will know you’re even there. Whether you’re looking to have a soft-launch or grand opening, you need the awareness that can come from a marketing plan. These opening efforts don’t have to be extremely expensive; you can use social media or trade promotions to build a foundation.
Beyond marketing a new business, advertising is essential to roll-out new products, features, menu items, or services. Even if you’re in a good groove with your product line and customer base, awareness is still crucial for companies to stay competitive. If you’re not investing in marketing, there’s a very good chance that your competitors are. There’s no finish line in business. It’s like exercise, you don’t get to stop just because you’ve hit your target weight. You must maintain your efforts to continue to see results. Furthermore, your goal should be TOMA (top of mind awareness.) This means that when people think about what you sell, they think about you. This requires good, smart marketing efforts.
Marketing Persuades Customers and Drives Conversions
Awareness is critical, but messaging is just as important in marketing. Television, radio, print, digital, and social advertising is the way most brands communicate with the public. It’s (usually) a one-way conversation where companies can pitch and demonstrate their value. Well-crafted messaging can persuade potential customers to sample your wares, making a direct line to increased revenue.
You may ask, how does the obvious benefit of good advertising messaging demonstrate ROI for marketing? The short answer is a question: How would you get your message out without marketing? The only “free” answer is word-of-mouth. It’s true that word of mouth is powerful, but the pool of ears that can hear what the mouths of your core customers say is usually small. It’s especially small when compared to the broad reach of the advertising platforms mentioned above. You may be thinking, “I can hang a sign from my storefront or print out flyers.” This is true, and it may be a good idea! Why? Because that’s a marketing investment. You will have hard costs (even if it’s just paper and markers) associated with those efforts. This proves the power of marketing’s impact on ROI with the caveat that you usually get back what you put out. Paper and markers will almost always generate less ROI than broadcast or digital, for example.
Marketing Encourages Repeat Business
We talked about top of mind awareness and staying competitive. Your goal should reach beyond building and growing your customer base, focusing marketing attention on keeping them. Customer retention is integral to the success of any business, and it theoretically costs less than acquiring new customers. Consider loyalty or rewards programs, or email blasts with discount codes for customers who have signed up. The marketing cost of an email and a 20% discount is negligible compared to the ROI it can easily generate. Get them in the door, and they’ll spend more!
Marketing budgets and plans come in all shapes and sizes. You may have to start small but be smart and targeted. The bottom line is that failing to invest in marketing is a choice you truly can’t afford to make.