Top 3 Ways to Waste Marketing Dollars
There are a dozen ways to spending a marketing budget unwisely, but the following three line items are probably the worst offenders. Steer clear of all three--or, better yet, make a tweak to transform them from money-wasters into moneymakers, .
1. Vendor-Focused Trade Shows
There are only two reasons to attend a trade show: 1) to generate sales leads or 2) to close existing opportunities. Both goals are impossible to achieve if neither customers nor potential customers attend the trade show.
For example, I know a guy who spent $100,000 for a booth at a trade show and got only 132 "sales leads." And all but 22 of those "leads" were people from other vendors who were looking for a new job.
In order to convince companies to pay for booth space, trade show companies tend to provide misleading attendee statistics--and sometimes threaten to make your non-attendance into a PR disaster.
- Smarter strategy: Insist that every trade show investment be matched by a reasonable financial return, in the form of sales leads that eventually generate revenue. If you're not confident the trade show will more than pay for itself, don't attend.
2. Brand Awareness Campaigns
Your brand is important. However, unless you're selling a mass-market consumer product and willing to spend many millions on advertising, it is your products and services that will create your brand--not your marketing activity.
I once watched a company spend $1 billion in brand marketing over a five-year period, while continuing to make products that fewer people wanted to buy. Their marketing collateral was gorgeous, but they went out of business.
The truth is that brochures, websites, videos, and advertisements aimed at raising "brand awareness" are usually a waste of money. There's just too much "brand spam" floating around for anyone to take notice.
- Smarter strategy: Set goals for and measure every marketing activity by whether (and how well) it creates sales leads or shortens the sales cycle. In other words, treat marketing activity as tactical, rather than strategic.
3. Bogus Market Research
Market research can give you an accurate snapshot of what your customers are thinking and feeling, providing that research is quantitative, statistically valid, and independent of a hidden agenda.
Unfortunately, most market research is qualitative, statistically invalid, and/or skewed to a foregone conclusion. "Focus groups," for instance, tell you nothing except what a small group of people think.
Similarly, most polls only test people who have already shown enough interest to agree to take the poll. Furthermore, "independent" research firms, when hired by vendors, usually know ahead of time what findings are desired and adjust the research to fit.
- Smarter strategy: Rather than waste money on custom market research, compile and contrast publicly available data that's gathered without a specific agenda--such as government statistics or market research aimed at a broader vendor audience.
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Geoffrey James, a contributing editor for Inc.com, is an author, speaker, and award-winning blogger. Originally a system architect, brand manager, and industry analyst inside two Fortune 100 companies, he's interviewed more than a thousand successful executives, managers, entrepreneurs, and gurus to discover how business really works. His most recent book is Business Without the Bullsh*t: 49 Secrets and Shortcuts You Need to Know. If you enjoyed this post, sign up for the free weekly Sales Source newsletter.