Kelvin had been marketing his business through several channels such as flyers, brochures, exhibitions, advertisement in magazines, door to door and some radio stations.
Last year due to financial constraints he stopped some of them. However, to his surprise there was no marginal difference in the annual sales performance.
He realised that some of the marketing channels that he treasured and spent a lot of money and time on were not effective. He immediately sought to find out which ones were effective and narrowed his marketing activities to just a few. The result was higher performance at a much lower cost.
In all industries, marketing is one area in business where there is a lot of wastage of resources. A lot of marketing money goes to waste every year due to various reasons, some of which include advertising in the wrong channels, unknowingly using strategies that do not work, lack of follow up, failure to communicate the right message, as well as lack of customer understanding. In fact, there is an axiom that marketers waste half of their money, but they just don’t know which half.
Well, several studies show that on average, across the industries, 25 percent of the marketing budget goes to waste.
When using different channels and strategies in your marketing endeavour, you are likely to make mistakes if you don’t do enough homework, research and follow up to know which ones work and which ones do not.
If you do not know which ones are working and which ones are not, you may continue spending a lot of money, especially if the business is performing well.
From a business perspective, it does not make sense for example to continue advertising in one medium which is not giving you any mileage simply because other channels are bringing excellent results.
It is extremely important to know which of your marketing activities are bringing in results and which ones are not. This needs not be an expensive exercise. Something as simple as finding out from your customers how they got to know about your products may help a great deal.
In management it is said that something that cannot be measured cannot be managed. You should not go into the market blindly. Before engaging in any marketing activity, list down the expected outcomes and how you will measure them on the basis of return on investment.
Sometimes it makes sense to a hire a marketing expert to engage with your customers and establish the best way to reach out to them. It will cost you but the benefits are immense. In the big picture you will save yourself a lot of money and efforts that go to waste by using marketing channels and strategies that do not work. You will be able to narrow down to what is really effective. When you know which side your bread is buttered, you will make informed decisions.