All businesses must invest in marketing before they can turn a profit. There are so many marketing avenues available, making it difficult to decide where to concentrate your marketing efforts to drive maximum return on investment (ROI). Choosing smart marketing investments can easily be the difference between business survival and business death, so you must fully explore your options before dedicating time, money and other resources to any marketing effort.
Marketing success is measured in terms of return on investment. Following this paradigm means understanding that the cheapest marketing effort isn't always the most cost effective. Your first priority in any marketing campaign is to attract the attention of your target audience. You have to know where to find your market segment.
Do the math
Let's say you're selling the latest $50 widget and you want to take out an ad in your local paper. Hey, they're cheap and a lot of people read the paper, right? You take out a six-week run for, say, $2,000 and end up selling 50 widgets, which grosses $2,500 and yields a $500 ROI.
Now, let's say you invest $4,000 in a direct-mail postcard campaign targeting people who can use your widget. You sell 200 widgets grossing $10,000 and yielding an ROI of $6,000.
Your direct-mail postcard is sent to a highly targeted audience instead of placed in a newspaper with a cornucopia of readers, so you'll earn more return. In this case, the more expensive campaign is much more profitable.
You can even break this down further. If you're going to launch a direct-mail postcard marketing campaign, it is wiser to spend extra money on quality printing, which will help you be perceived as a quality company and drive additional response. In addition, attention-getting devices such as oversized postcard printing and creative copywriting constitute money well-spent, because they factor so well in end-result ROI.
Get free publicity
Understanding your target audience and the ROI concept aren't the only ways to make smart marketing investments. Seek free publicity as part of your overall branding efforts - give to charities, submit press releases, talk to reporters, write articles for free publication and appear as a guest in newspapers, on radio and on television.
You must also consider your offer, which should include a discount, savings, free product or service that is valuable to your audience. Such incentives cost money, but you can spend wisely here. Do you have an hourly employee that can fulfill the offer for your audience? You're already paying the person to be there, so you're not out any money there. If you're offering a discount, cut enough off the price to make it a good deal, but leave enough mark-up to turn a reasonable profit. If you're giving away a free product or service, make up the price elsewhere or give something away that you have a surplus of and won't move otherwise (as long as it has good value - and especially if accessories can be sold for it).
When making smart marketing investments, you must always consider the bottom line and how long it will take to realize your ROI. Some campaigns can take months to come to fruition and would not be ideal for startups. Understand what it will take to survive in the long run and don't be afraid to spend a little more now to make a lot more later.