Following on from the flexible business model that we developed to ensure the perpetual survival of businesses for what looks like a long period of economic stagnation, it makes sense to explore how growth can be achieved without ‘betting the farm’.
While businesses may breathe a sigh of relief if they have followed our advice on how to ensure their survival, it is also necessary to look at the marketing model. The principles of flexible marketing are similar to those of survival as they involve tight cash management and being aware of the fixed nature of many contracts for promotion initiatives that either don’t work or become a financial burden.
Marketing can be complicated as it involves getting a mix right between many variables. There are lots of alternative ways to achieve marketing objectives where it is often difficult to measure success in terms of ‘return on marketing spend’ or ‘bang for buck’ when developing a marketing plan.
Quite apart from developing a plan, marketing activities can serve a number of purposes which makes measurement even more difficult. The model that works best will be different for every business, but when markets are so uncertain and cash is tight marketing can make the difference between failure, survival or growth. The real issue is uncertainty where the key is to understand and then manage the relationship between cost and return for different marketing activities. Flexibility reduces the cost of switching between activities which in turn reduces the cost of getting it wrong. The process involves continuously improving your ability to be certain about the cost and outcome of any marketing initiatives.
There are a vast number of possible objectives such as: generating new sales leads, selling different products or services to existing customers, launching a new product, persuading potential customers to buy from you, or reassuring clients by building a reputation. This latter objective of establishing credibility is common for those firms that sell advice or professional services when they want to set up or move into a new geographical market.
Having established your purpose and defined marketing objectives it is necessary to consider the possible marketing initiatives, affordability and how they might be measured in terms of cost and outcome.
Essentially the flexible marketing model is based on a process of trial and error where you can afford to get it wrong. Until the outcome is established through measurement most marketing initiatives are a speculative investment. The challenge is to compare the outcome with lots of different initiatives.
Simply placing a single advertisement can work for some firms even if it is expensive, providing the results justify the cost. Many businesses like emergency repair services used to rely on one large advert in Yellow Pages. Now it is more difficult for the plumber or locksmith to ensure potential customers find their advert when they have an emergency. Nowadays such firms need to be listed in a large number of possible directories including online.
Affordability versus flexibility can be an issue especially when payment is spread over a period of time. After their hype, many advertising and promotion contracts are regretted when expectations aren’t met. It is acknowledged that flexibility is likely to cost more but there is a distinction between trialling a marketing initiative and a long-term campaign that will almost certainly be cheaper, unless the marketing benefits have already been established so as to justify the financial commitment.
Most initiatives can be easily trialled and measured without the need for a long-term commitment to test whether they work, e.g. pay per click such as Google Adwords, internet banners, leaflets, posters, adverts on print, radio or television, redemption vouchers, point of sale promotions, text based promotions, stands at trade fairs and even short-term rent or pop-up shops.
Comparing the costs versus benefits for several initiatives will help refine the marketing model and over time improve the certainty of a return on marketing investment.
Less easy to measure are longer term marketing initiatives such as publishing articles in online media to generate visits to a company’s website. Similarly public relations and press releases to relevant media can generate press interest that raises awareness but may not produce immediate sales. These need not be expensive and can help establish a reputation for the business as an expert in its field which is reinforced by articles and press coverage. While this is a more speculative approach to marketing it offers longer term benefits since print and internet published articles and press coverage tend to be picked up by search engines and therefore have a long life. To some extent the decision to use such methods will depend on whether the business firstly can afford to invest the money and secondly is looking to a longer term return than immediate sales or orders.
Another tactic to consider might be ‘bootstrap’ or ‘guerrilla’ marketing which is especially useful when a business has little money to spend on marketing. A good example is promotion of the Ultimo silicone gel bra by Michelle Mone when it was launched in Selfridges. With little money for a marketing campaign Michelle hired out of work actors, dressed them in hospital masks and coats, gave them placards and alerted the press to a protest in Oxford Street by cosmetic surgeons against the loss of work they would suffer because of this new bra.
Whatever initiatives are deployed, the marketing mix needs to be continuously reviewed and refined in exactly the same way as applies to using a flexible, cost sensitive business model.
Add a flexible marketing model to a flexible business model and you can both ensure perpetual survival in a difficult economic climate and perpetual growth.