Return on Marketing Requires an Investment

One of the most important decisions a business owner or CEO will make is establishing a budget for marketing. Like talent, product and infrastructure, marketing must be viewed as a necessity in business.  Marketing expenditures are essential investments for growth.

An average SMB (small-to-medium size business) will typically set a marketing budget at 4% to 6% of sales revenues.  There are several factors that can impact this budget.  As an example, a well-funded startup may invest 20% of revenues for aggressive consumer acquisition programs and advertising.  Notice, the “well-funded” qualifier.  Likewise, there is always difficulty in setting a budget for a pre-revenue company. Entrepreneurs will often spend most of their investments in product and then struggle to bring in sales. Startup costs must include marketing.  For every dollar invested in product, people and infrastructure, an equal dollar should be set aside for investment in sales and marketing.

Here are three simplified phases for marketing investment planning:

1.  Brand Awareness:  Your marketing investment should start with focus in reach and awareness including brand identity, a website, company advertising and direct and social marketing.

2.  Engagement: The second phase invests in additional marketing programs that support your sales efforts including lead generation, publicity, web marketing (SEO and SEM), market validation, events, advertising, presentations and customer case studies.

3.  Nurture:  Finally, maximize your marketing investments with customer communications, CRM services, loyalty initiatives and nurturing programs to maintain the valuable potential and existing customer relationships.  Once you have them engaged, use your marketing spend wisely to develop and grow your relationship.

After your marketing budget is defined, you will want to establish how you will measure the success of your investment.  ROMI is the acronym for Return on Marketing Investment.  The calculation is total revenue divided by marketing spend.  ROMI = Revenue ($) / Marketing Spend ($).

Some marketing activities such as branding, advertising, PR and social media are harder to track impact and influence. As a rule of thumb, the simple ROMI equation gives you a thumbnail sketch of your return on your marketing investment.  ROMI is a good KPI (key performance indicator) for leaders to use in the business dashboard.

If you are a startup or pre-revenue, the marketing spend will be set as your budget for purposes of forecasting. Some may argue that there should be other factors added or subtracted, such as attributable revenues; however, most businesses have a difficult time tracking every dollar spent on activities such as advertising. Start with the broadest “buckets” and as you increase your marketing reporting and tracking sophistication, you can scrutinize spending with finer analysis.

Marketing is an investment.  Success in ROMI requires budgeting, reporting and analysis in order to fully actualize the benefits.

In lean times, business owners have a tendency to cut marketing spend. Lost time and lack of investment, even during challenging periods, impacts long-term growth. The result may not be felt right away. It is an illusion. Prolonged periods of reduced marketing spend can dramatically reduce sales opportunities. The fewer dollars you put into a marketing budget the greater the exponential impact on future revenues.

Similar to an investment savings account, the more you put into your “growth” marketing account, the higher potential return on your investment. The more dollars spent on high risk marketing activities, the greater risk to returns. Any sound investment advisor, marketing or financial, will counsel a business owner and CEO to invest based on the organization’s risk tolerance.  Marketing investments should be treated like any financial investment.  Know your risk tolerance, invest accordingly.  If the business has low tolerance for risk, eliminate marketing spend in expensive tactics that are difficult to measure. Always diversify your investment to mitigate risk.

In order to qualify for a return, it requires an investment.  Failing to set aside funds to market is failing to invest in business sustainability.  Expectations of sales without an adequate marketing budget is a business built on luck. Though we would all like to be lucky, if you plan to sell something, invest in marketing to create the sale.

“I have a problem with too much money. I can’t reinvest it fast enough, and because I reinvest it, more money comes in. Yes, the rich do get richer.” -Robert Kiyosaki

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

Who Makes the First Impression for Your Business?

First impressions for your business are made by people that open doors, make cold calls, attend networking meetings and answer your phone.  They are delivered by your marketing communications like social media and websites.  How confident are you that your potential clients are greeted warmly and with a direct invitation to do business?

Years ago businesses paid someone to sit at a front lobby desk and answer every inbound call and greet every walk-in appointment.  The receptionist qualifications were measured by friendliness, service-orientation and attentive disposition.  The standard phone greeting of this time was “Thank you for calling, how can I help you?”

When is the last time were greeted this way?  Today we are often met with automated attendants and empty lobbies.  Some businesses have completely eliminated any dedicated space to a welcome station and filled it with another cubical. My impression is that first impressions are not a priority for this business.  The decision that customer experience may be too costly to employ a dedicated person, may be costing you business.

It is not difficult to think back to a bad first impression.  I recall three in the past weeks.  One top restaurant asked me to wait outside in 110 degrees because they did not open for four minutes, yet the door was unlocked.  Another restaurant hostess asked me to stand until my party arrived even though every table was empty.  A technology company, which had a sitting place upon entry, left me for 20 minutes while employees stared at me.  Not one person asked why I was there or if I needed help.  I remember all of these first impressions, vividly.

Noted in a recent New York Times article Praise Is Fleeting, but Brickbats We Recall, “Bad emotions, bad parents and bad feedback have more impact than good ones. Bad impressions and bad stereotypes are quicker to form and more resistant to disconfirmation than good ones.” Sited from Roy F. Baumeister, a professor of social psychology at Florida State University in a journal article he co-authored in 2001, “Bad Is Stronger Than Good.”

How your employees are greeting the public, networking, making introductions, and opening doors for others is a direct reflection of hiring skills, company culture and leadership.  Business owners, CEOs and managers own the customer experience.  Every employee is responsible for making a positive first impression.  How are you reinforcing how positive first impressions are made in your business?

Customer experience is a financial decision in business, unless revenues are low on the priority list.  Reputation management is critical and costly.  A bad review is hard to overcome.  You can’t erase the Internet or someone’s memory.  People use others professional and personal experiences as a reason to buy or not buy. Bad experiences are viral, whether online, through social media, on sites that track reputations or by word-of-mouth.  Once word is out, it is permanent.  You own it!

Every experience starts with the greeting.  Take time to review how your potential and existing customers are greeted today.  This applies whether you are selling B2B or B2C, for every industry, in a building or online.  Use “secret shoppers” and have them rate how inviting, caring, and enthusiastic they were welcomed to do business with you.

Customer service is a pillar to good business.  Customer experience starts when the phone is picked up, the door is unlocked or a web site is visited.  We may not all have the luxury of hanging up a flashing “Welcome to Fabulous Las Vegas” sign to greet everyone.  We do have the luxury to manage and train our messengers to provide an outstanding first impression.

Invest in your greeting.  Define, train, test and continually reinforce how you want to insure a positive first impression.  It your opportunity to create a long-term valuable relationship with your customer.

Jamie Glass, CMO and President of Artful Thinkers, a sales and marketing consulting company. Creative. Strategic. Results.  Follow @jglass8

What is Your Marketing Meme?

Will Your Meme Go Viral?

A meme (pronounced meem) is a packet of social information.  Marketing memes are word associations, beyond a tag line or slogan, that take complex concepts or ideas and make them simple and easy to communicate.

A meme is defined in Wikipedia as “a unit for carrying cultural ideas, symbols or practices, which can be transmitted from one mind to another through writing, speech, gestures, rituals or other imitable phenomena.”

Effective memes are potent messaging serums, dripped out over time that enter into our brains and stick. Think of your marketing meme as your viral message.  Who you represent, what you do and what you offer, tightly packaged into one memorable soundbite.

Memes are easy to replicate.  Good memes always communicate value and benefit.  It is the message you want propagated all over the world about you and your business.

I first learned about crafting memes from a Fortune 500 marketing expert who spent his time coaching several solopreneurs on how to market their own businesses.  To some, it may seem odd that an experienced marketing executive would spend weeks learning how to market themselves.  Admittedly, I was resistant at first. After all, I have been responsible for marketing multiple million dollar business for years.

Attitude and all, I threw myself into doing something I was avoiding — marketing me! It is hard to market yourself, let alone dedicate the time required to build your own marketing communications plan.  Truthfully, I needed the discipline and focus to develop my own meme. In the end, besides a business card, it was the best marketing investment I made in starting my own business.

An effective marketing meme is a single powerful statement that communicates the benefits of your products and services.  Here are some simple steps to help you craft an effective marketing meme:

1.  In one sentence, write down what you do for your customers.

2.  Next sentence describe the value you provide to your customers.

3.  Outline the problems you solve in the last sentence.

4.  Now start cutting! Combine the three sentences into one very simple, benefit-oriented sentence.  Answer who, what and why it matters in a single sentence.

5.  Test your meme with the following questions:  Can you repeat that sentence over and over again?  It is easy to remember?  Will your meme invite people to want to know more?

Memes are clear value propositions that roll off the tip of your tongue at every introduction.  An effective meme is not a slogan or headline. It is not an elevator pitch.  You rarely get 30 to 60 seconds to cite a rehearsed sales pitch.  It needs to be tight, concise and memorable.

Use your Meme Everywhere

Memes create lasting impressions. They are the words people will carry with them and tell others about you and your business.  Marketers often suggest that it takes seven times before a message really sticks.  It’s called the Rule of Seven. Will your meme be repeated by every person you tell seven times or more?  If so, then you have truly created an effective, viral marketing meme!

Invest time in creating your meme and start sharing it with world.  Repeat it often, in presentations, in meetings, on the web. Make sure your meme is a simple message that leaves us wanting more.

Special Note:  This post is dedicated to my friend and marketing mentor John Coyne.  He patiently worked with me to create my Artful Thinkers meme. His influence and teachings are still making an impact. He will always have a lasting impression. RIP my friend.

What Does the Brand of YOU Represent?

Winning in the Branding of YOU

Branding is an art and science for marketers.  They blend the key attributes of a product, service or company and position them to appeal to a consumer.

Using scientific research, data and analytics, the brand marketer artfully crafts visual and written communications targeting emotions and logic of the intended audience.  The ultimate goal is to drive to an action, such as buy or like me.

How does this relate to the branding of YOU?  We are all a brand.  Seth Godin defines a brand as “…the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.  It is how we present ourselves, talk about ourselves and how we are remembered by others.  Branding applies to all aspects of life, professional and personal.  It is the first and last impression of YOU.

If every encounter in life was a personal moment for YOU to brand yourself, what are the words and actions that repeatedly represent YOU?  More importantly, would you want everyone to repeat them over and over again?  Will you be remembered as “Have it your way” (Burger King) or “I’m lovin’ it” (McDonalds) or “Avoid the Noid” (Domino’s Pizza)?

Professional branding is critical for your career.  The words that others use to describe you, are your brand.  You own it.  It may be a definition that comes from a collection of interactions or a single opportunity you had to gain respect and credibility in a brief encounter.

There are several ways for you to represent the brand of YOU.

1.  Introduction.  This is your 90 seconds at a shot of fame.  Whatever comes out of your mouth or you share in an email, is your opportunity to make your brand pitch.  It is the firm handshake opportunity.  Face-to-face, you have an opportunity to say with confidence who you are, what you do and what you represent.  It is the YOU moment.  In email, it is your invitation to draw someone in to know and learn more.  It should be short, to the point and always conclude with a call to action.  Think of it as your 140 character tweet about YOU.

2.  Social Media.  What you post on the Internet is your brand.  And, it does live forever.  It is how you are represented on Facebook, Google+, LinkedIn, Twitter, Instagram, YouTube, blogs, and so on.  In other words, the brand of YOU is everywhere you put a comment, post or uploaded something to the world wide web!  Before you hit send or enter, think how it represents YOU.

3.  Your CV.  A curriculum vitae (CV) provides a summary of YOU by experience and skills.  It is your brand summary.  Your CV should clearly articulate your strengths.  It is the summary on your LinkedIn profile.

4.  The YOU Meme.  The one way to control your brand is to have a practiced “meme”. ”A meme is an idea that behaves like a virus–that moves through a population, taking hold in each person it infects.” says Malcolm Gladwell.  Your branding meme is what others take with them and tell others, over and over again.  It is your “viral” message.  A meme should delivered in 60-90 seconds and cover all the unique characteristics that you want others to remember about YOU.

The creation, care and management of the brand of YOU is very important. It has tremendous monetary value.  You are your best brand PR agent, you are the one to spread the word about YOU. The impression you make in the marketplace will confirm YOU are a good “buy” or confirm why people have no interest in buying what you are selling!  How others talk about YOU will affirm what YOU represent.

Take time to think about the qualities of YOU and what YOU represent, then how YOU can position this to others to create actions or get results.  Rehearse your meme.

Like the Brand of YOU

You can always improve on your brand; however, reputation management is a costly proposition if you have a damaged brand.  Even a lot of money can’t always repair a brand.  We all like brands that represent qualities that are good and positive. Be authentic, truthful and confident.  Make sure that your brand represents the real YOU.