Saving money on marketing isn’t just about cutting the cost of a retainer or getting a new website cheaper.
Depending which study you read, marketers waste anywhere between 26% and 60% of marketing spend, and in our own experience of working with SMEs and larger businesses, up to 50% of marketing expenditure is wasted.
The key then is to identify and eliminate those areas of wasted marketing spend without impacting sales.
There are three key areas of waste:
1. Poor operational processes
Poor processes around briefing agency partners and testing inevitably leads to rework – another obvious waste of money.
After spending years working both client and agency side, our marketing experts know what works best when it comes to managing agency relationships.
Huge amounts of time and money can be wasted by any or all of the following:
- not involving the right people from the start
- poor targeting with little insights or research
- inconsistent briefing approach
- change requests not managed effectively
Good processes throughout, on the other hand, save time and money – crucial in a growing company that may be bringing new products to market, and wanting to steal a march on the competition.
2. Using inappropriate channels / poor targeting
Let me give you an example. Some companies use TV advertising as an approach.
This costs £millions.
In one case, when we looked at the target market for their products, we discovered that it was only 3% of the population.
We switched them to a more direct approach, saving literally millions and actually increasing sales at the same time!
Now, that's an extreme example, but a careful review of the size of the target market in comparison with the reach of each channel is a good guide as to the VALUE you are likely to get from each one.
3. Not fully understanding the results
Marketing requires a forensic approach to evaluating results.
Reporting a high click rate might sound good, for example, until you learn that most of the clicks happened in Australia when your target market is the UK.
(Or worse, that the clicks were made fraudulently by bots used to boost the results!)
Worse still, many marketers still don’t actually measure the results in a way that links marketing investment to actual sales revenue or brand awareness.
This demands that marketing, product and sales teams are fully aligned - that they share a common language, data and ultimately work to the same end goal.
Making sure that the results match up to your KPIs will help to assess which channels drive the most revenue, and which areas of spend need to be cut back, or increased.
If you're a growing company, worried that marketing spend appears to be running away with you but unsure what to do about it, contact us to see if we can help you control expenditure and maximise marketing success.
Of course, improving marketing and driving more sales is just one route to increasing business value. Find more examples in our eBook "5 ways to increase enterprise value" or view our blog "5 ways to accelerate business growth".