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“I Can’t Invest Resources in Marketing until More Business Arrives”

By July 3, 2017 No Comments

Disciplines Engaged: Think, Plan, Write, Assess

It’s the most oxymoronic statement I hear from clients and prospective clients. And I hear it quite often. Just last month, in fact, a would-be client who has been eager to grow her business informed me that the website overhaul and new marketing strategy we’d been talking was on hold … she wanted to see her business pick up this month before she committed to the new expenditures.

“A (person) who stops marketing to save money is like a (person) who stops a clock to save time.” That was Henry Ford about a billion years ago and this was in an era when marketing required a significant larger investment of money, when the process involved with identifying the problem, coming up with the ideas, building the strategy, and executing the strategy took several months at a minimum. Such can be accomplished today in weeks, if not days, and at a tiny fraction of the comparative cost.

Keep this in mind – failing to understand clients’ needs and delivering messages that resonate with those clients is the biggest obstacle that prevents small businesses from flourishing.

Big businesses have a different problem. Most have bad messaging that doesn’t connect with their clients, but they do enough saturation with their messaging and their brand that the prospects ultimately acquiesce. I think of the insurance and credit card companies whose television and radio advertising is anything but clever, but, guess what? When it comes time to buy car insurance or apply for a credit card, you’ll remember their names. With billions of dollars behind them, the taglines delivered by cave men, geckos, has-been celebrities, and pillaging Vikings eventually sink in: “15 minutes can save you 15 percent or more on car insurance” and “What’s in your wallet?”

The same phenomenon – cutting discretionary spending (aka “marketing”) is the first place that businesses go when an economic downturn rears its head. It is this knee-jerk reaction that accelerates companies’ succumbing to the downturn. The magnitude of the downturn becomes a self-fulfilling prophecy, this when a little creative thinking and a comparably small investment in marketing would have disproportionate ability to echo through the ears of your clients as most of your competitors make the same mistake.

Have you ever been at a party or at one of your kids’ athletic events and met someone who seems nice enough, but who maybe doesn’t seem like his or her candle is fully lit, and yet somehow he or she is operating a thriving business? Sometimes the person’s grandfather happened upon a great business idea back in the 1950s, but often this person started the business and you just can’t understand how the same person who can’t navigate the rules of soccer can successfully navigate a business.

Let me relieve your curiosity. That person’s secret is marketing, even if he or she is too dull to recognize it.

Perhaps that person is a natural sales person. Maybe he or she happened upon the magic of newspaper advertising back in the 1980s. Or maybe he or she has someone behind the scenes doing magic with social media, SEO, and digital advertising. In any case, it all advances like clockwork, the clients arrive, and you scratch your head until one day, while the kids are grabbing snacks and drinks at the end of the game and you see that the name of this parent’s company is silk-screened on the back of your kid’s uniform as a sponsor.

What also happens is that people neglect to recognize what’s really working – they allow “me-search,” their own perceptions of what is working cloud their judgment of what actually works. “Those direct mail packages? I just throw them away the moment I get my mail.”

Let me give you a real-life example of this. In 2005, while I was working in a marketing capacity at an organization known as CFA Institute, the enrollment in the organization’s signature offering, the CFA Program, had leveled off. “The market has finally reached its saturation point,” said the CEO, and senior management all nodded their heads in agreement.” Never mind that we had never really done any significant marketing (“It will never work with our prospects”). We had just built a phenomenally successful certification program and allowed investment professionals to come find us. And that worked very well for a long time.

But in the year or two leading up to 2005, it was true, numbers had leveled off at about 90,000 candidates. This had been anticipated, even if no one had done any research to reach the conclusion that 90,000 was the high-water mark. For reasons I won’t get into, I had some discretionary money that year to invest in recruitment marketing. And, to say the least, in an organization where people analyzed things to the smallest detail, no one outside of my team really noticed that we began placing recruitment advertising in trade publications. In December of 2005, our budget called for new registrations for Level I of the exam to drop. Instead they jumped by more than 20 percent.

No one knew what had happened, and my explanation – that we finally had done some recruitment marketing – did not register with senior management. They concluded it was an anomaly and the following year, we once again budgeted for new registrations to shrink.

For reasons that are equally unimportant, the following year I had even MORE funds at my disposal and now we got even smarter about our marketing approach. Based on some research we had fielded, we learned which were the markets with the largest populations of investment professionals but with the lowest concentration of participants in the CFA Program. We then fielded a much larger marketing campaign that again included a healthy dose of print advertising along with digital advertising (relatively ambitious at the time) and direct mail.

What happened next was deemed a miracle by management. New registrations in the CFA program SURGED, first for the June 2006 exam and then even more for the December 2006 exam. Finally, the CEO and management asked me to explain what had happened. If I couldn’t prove my advertising and marketing was the cause of the new registrations then it must not be true. So, we put our heads together and came up with the idea. If there was 30 percent growth year over year, and the overall growth was about that, then logic would suggest that if it simply were organic growth, then the new registrations would have arrived each month at or around that same percentage, 30 percent.

So, we analyzed the growth, month by month, and put together charts and I went a meeting with the CEO and senior management and showed them what I found. They agreed to my premise, that if overall, year-over-year growth was 30 percent, then each month’s growth should be about 30 percent, compared with the previous year.

Except it wasn’t, not even close. In September and October, there wasn’t any growth at all compared with the same months the year before; there was even a decline. In November and December, the year-over-year growth was way higher than 30 percent, something like 50 percent. In January and February, there was growth, but much smaller than 30 percent and then in March and April, the numbers once again mushroomed, this time it was like 70 percent. I had all of this up on a PowerPoint presentation and the room started to buzz, finally we were seeing that SOMETHING was at play. It wasn’t just organic growth.

Then, I showed them something else, I did an overlay on the chart that showed the months when we did our heaviest recruitment advertising. And it was during those months where we saw the strongest growth that was when we were doing our recruitment. I whittled it down by our target markets – India, China, Russia, Brazil, and the U.S. – and the numbers were even more dramatic: 90 percent, 115 percent, 85 percent growth.

There was no denying it, the marketing was at play. I was doing mental calculations in my head about how I was going to spend the extra-large performance bonus I was sure to get that year.

But then our CFO asked me an odd question. “Jim, I see that your chart has SMOOTH curves on it during each of the months of the year,” he said. “Is this chart demonstrating growth on a DAILY basis or a MONTHLY BASIS?” I was confused by the question, I must say, but I told him “Monthly, why do you ask?” He clearly smelled blood in the water and felt he had found a way to make points with the CEO while taking credit away from my marketing team. “Well,” he went on, “if this chart is comparing monthly data, then there would be points on the charts for each month and the lines would be jagged, not smooth.” With that, everyone in the room began nodding their heads in agreement, my explanation was debunked, and the organization went back to its belief that the growth had not been the result of our recruitment marketing, but just unexplained market forces.

When I left the room, I went to my (brilliant) market research specialist and asked her why the lines were smooth and not jagged. She said, “I thought the smooth lines looked prettier.”

There would be no bonus that year. I even was chastised for not being able to prove that the recruitment marketing was the source of the growth. This because of the pretty lines.

Let’s Shoot Now & Ask Questions Later

 

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