Why marketing cost shouldn’t be just measured by what you spend but the deeper impact of what you don’t
Written by Cheryl Morris from Creative Word PR
When people talk about the benefits of PR and Marketing, they often focus on the cost of each activity. How much they spend on different platforms and what engagement and results they receive during that period.
What businesses fail to measure is the impact of not being strategic in their activity and how that can have a detrimental effect on overall growth. The missed connections, the lost contracts and failed reach of not sharing your business story.
Doing nothing or limiting activity in the short term may appear to save money but comes with far deeper implications that limit rather than support growth.
We look at seven hidden costs to cutting marketing budget.
1 Loss of market share as competitors gain from your silence
Outdated websites, poor marketing and limited online and physical presence means competitors instantly become more attractive.
Businesses lose sales without ever knowing the opportunity existed as they simply don’t have a strong enough presence to be found.
This means that competitors are gradually given the space to establish themselves as the preferred provider making it harder for companies to compete.
2 Lack of resiliency as pipeline limited
Word of mouth and referrals will get you so far but without marketing to new audiences the business will stagnate.
It means that with a smaller pipeline you are vulnerable if one client leaves. There are no back up opportunities and wider customer base to create prospects.
Strong marketing and PR create opportunities. It gets people talking about your business so that you are seen as credible in your market.
3 Repeat sales are missed
Outdated marketing materials don’t reflect the true nature of the business. Lack of communication means current and potential customers aren’t kept up to date with new services or offers, limiting the opportunities to increase revenue.
Good marketing helps to cross sell; it knows when clients are likely to need to renew services or upgrade products and delivers clear messaging to the right person at the right time. This helps to increase the chances of retaining customers long-term creating greater growth opportunities.
4 Large contracts difficult due to lack of visibility and credibility
Before someone buys from any business they need to like and trust the brand. This trust and credibility is built up through customer reviews, case studies, expert PR articles and third-party endorsements such as media coverage and social shares.
A lack of visibility not only means that a business can’t be found it means that there is no story around why it stands out from competitors. This lack of trust will not only make you less attractive to buyers but can affect future bids. Funding and tenders all rely on referrals and reviews to back up your application.
If you are struggling to get your bids across the line, it may not be that the business isn’t capable but that it isn’t marketing its potential effectively.
5 Limited growth as it becomes difficult to recruit
Lack of presence doesn’t just affect sales and customer visibility it also affects the ability to recruit. Strong growth relies on a company recruiting and retaining a strong and knowledgeable work force.
Employees are reluctant to move to businesses that do not demonstrate strong job security. They look for well-known companies, with positive reviews of what it is like to work there and that demonstrate growth and innovation.
Businesses that don’t invest in telling their story will have little or no presence to tempt employees when they look to grow the business. Without additional staff it limits the growth capacity as well as productivity.
6 Earning capacity capped due to lack of value
Expert PR features, case studies and news coverage all seek to show expertise. They create value and give a brand an identity which makes them stand out.
Lack of brand awareness and reputation building can result in reduced profit margins and earning capacity as the brand isn’t strong enough to command higher revenue.
7 Lack of consistency means it costs more to win clients
With out a strategic plan any activity is just guess work. Activity is often sporadic and doesn’t have as much impact as it would if it was all working together.
Dipping in and out of marketing and PR will mean that you lose momentum. Every time you restart you are starting from the bottom and having to rebuild the reputation and engagement. Maintaining consistent activity means that you are continually drip feeding that message and can be savvier with your budget.
The financial impact of marketing and PR runs deeper than what you spend. Initial savings made by reducing PR and marketing budgets may seem like financial gains for a company but financial impact is just as much affected by what you don’t spend as what you do.
It’s the lost revenue and missed opportunities due to the lack of visibility and value you hold in the market.
Failing to deliver a strong, strategic marketing and PR strategy leaves companies struggling to grow and hidden in the market.