You Wouldn’t Hate Marketing If You Got More Revenue & Higher Valuation
(As appeared in Forbes.)
We’ve spent years working with hundreds of CEOs in high growth middle-market companies and the Private Equity companies buying them. About three of them liked marketing and advertising. I suppose we can thank Mad Men for that. Oh, and the liars. They haven’t helped the marketing and advertising industry.
Most CEOs and investors feel that marketing and PR is the trade of either volatile geniuses or snake oil salesmen. Which is sometimes OK—when it’s their snake oil—but they still don’t trust agencies.
Picking an agency that will make you money rather than help you spend it
When companies select agencies, they have to sift through a lot of BS.
Everyone seems likable at first, and both the company and agency are excited to get ‘the new brand built’ or ‘get the campaign going.’ Too often, the partners start the work before being brutally honest about what success looks like.
In truth, in the desire to get moving, companies don’t often know what success will be—besides more clicks, more phones ringing and the need to hire more sales people.
If the agency isn’t asking you about those basics (the number of leads you need, your conversion rates, and your historical marketing performance) get them out. If they ask these questions and show you the performance they’ve had with other clients, you may stand a chance of making more than you spend on marketing.
If you find an agency that goes a step further asking about your product roadmap, your current market share, the growth of your category or your exit strategy, you are looking at a strategic partner that can help you grow.
Marketing costs money and takes time, just like everything else
You’re going to have to spend money on marketing one way or another. There is no such thing as marketing that pays for itself.
Marketing is sometimes speculative—if it’s done right. It is sometimes risky—if it’s pushing you to stand out and take a chance. It is big and costly if you’re trying to cross a chasm. And, with the right partner, it is relevant to your customers and shareholders.
Stop telling agencies you have an unlimited budget for programs that generate revenue. It’s not an agencies job to fully guarantee performance. They don’t build and sell your products. They help you do that better, with a more compelling story that connects with your people and customers…and motivates them.
Things Strategic Marketing Can Do To Make You Money
- Better target your prospects – if you’ve ever studied direct mail (don’t we all?), the performance of a campaign is based in large part on the quality of the list. If you are marketing to everyone or marketing to the wrong group, you will never see a return on your marketing. Narrow your target and simplify your message and watch your lead quality go up.
- Stop talking to yourself – too many companies spend time talking about what they have built or how they do what they do. Do some research and find out what difference you make to your customers. Talk about the difference you make and watch your conversion rate go up.
- Don’t talk to prospects at the exclusion of your customer – Companies stay so focused on the top of the funnel, they forget that their real growth comes from the insights and recurring revenue of those that come out the bottom. Is your customer marketing as focused and aggressive as your prospect marketing?
- Begin marketing your new offerings in advance of their arrival – It takes time to warm up a market. Don’t wait until you have product in hand to start talking about what you can do. A market that has been primed closes a lot faster. And, if you primed them before your competitors, you’re higher in the consideration set and more likely on the short-list of providers.
- Don’t let junior marketers plan your marketing – If you’re concerned that marketing is a big bucket of undefined activity or waste, put someone important on it. If your spend is big, know what things generate results. If your spend is small, it’s doubly important. To stretch dollars, you must hypothesize where the payoff will be the biggest. People that don’t understand your pricing model, your ROI metrics, your market potential, and your expansion plan are not qualified to do your marketing plan.
- Your valuation is about much more than your sales pipeline – If you’re a mid-market company, you’ve got big growth planned that requires capital. To approach investors or the market, you need a story that demonstrates the value of your thought leadership, your unique industry position, your ‘first of its kind’ IP, your market dominance, and your innovation. Be sure your marketing includes campaigns and stories that go beyond this quarter’s sales targets and positions you for your future.
2017 Can Look Very Different If You Look Differently At Your Marketing
Customers stopped trusting advertising years ago.
Today, even if they did trust your marketing, your message is buried in a sea of data and supposition from a million touch points. You cannot outspend your competition. The world is your competition.
You must be smarter about how you connect with prospects and customers. You must do so in a way that advances your position with them at every touch point. You must begin to know which touch points work better for customers. You must be strategic—but not necessarily more formulaic about it.
Find marketers and partners that understand your business and your business goals.
Stop asking your marketers to guarantee what they do and free them to take risks on more informed hypotheses. That’s the stuff growth and exponential value comes from. And whatever it costs, it’s more likely to be worth it.