“I know that half the money I spend on advertising is wasted. My only problem is that I don’t know which half.”
This quote – variously attributed to Henry Ford, Lord Leverhulme, John Wanamaker or J.C. Penney, continues to circulate the budget discussions – especially and inevitably – about marketing.
We all want to control costs and so dislike waste. Especially if we cannot see anything tangible that has come from our expenditure.
I have been exploring this with some friends in my network of fellow trainers and HR professionals in the Chartered Institute of Personnel & Development.(CIPD). We invited Zoe Russell, a marketing consultant from ZHR Marketing, to join us.
I have since checked this quote out in an excellent essay from 2013 by Jeremy Bullmore, one of the most respected voices in advertising. (Yes, this is advertising and marketing, so they would say that wouldn’t they? If you are keen, you can read his work and draw your own conclusions.)
Zoe’s take on waste was instructive: if you are making generic offerings then that is the origin of waste. More effective means would be targeting your marketing at the people you want as customers. This principle applies if you are selling ice cream or are in B2B non tangible sales: training, for example.
This got me thinking. My ‘target market’ includes management teams in organisations, yet I am also working with recent start ups and small, high growth businesses. Those parameters may or may not include you.
Yet just because you have a target customer, that does not exclude others who seemingly do not fit that brief. I also talk to ‘third sector’ organisations and people in financial services. Having a target gives you something to aim at – you know you will not hit it every time.
Jeremy Bullmore goes a step further, to emphasize that advertising effort is inherently wasteful: those adverts on TV or online, seen by millions but which only apply to thousands.
In the same spirit Phil’s Finance Thoughts will not hit the spot with every reader every week. I hope you gain some value and insight, possibly even an idea to apply, but I do not aim to please all the people all the time.
Marketing and advertising do not just involve money either: it is the time and effort. Daily social media posts – seemingly free – means there is much wasted time and energy in that.
How can you reduce waste?
Yes, target your time, energy, and money.
But doing and spending nothing will say as much about you and you approach to taking risks as any large-scale billboard or TV advert. If your success rate is 50%, you will be doing very well. You may only need 1% to hit the spot.
Waste becomes more relevant when you feel you are not achieving value from the budget you spend. But there is a limit to how much you can cut costs – you will not get below zero, and I have yet to find a business which can find and serve more customers by restricting its activity.
Maybe you get better value if you think half of your budget expenditure is working well – even if you do not know which half?
Buzzwords of the Week – Initial Public Offering (IPO)
Definition – The US term for what in the UK we used to call flotation. It is the process of offering shares of a private company to the public in a new stock issue. This allows a company to raise capital from public investors. The transition from a private to a public company can be a method for private investors to realize gains by selling to new public investors.
Alternate View – Note the 2 parts the definition: raising capital and enabling private investors to realize gains. Another reason could be to reduce debt. The question with an IPO is not how much but why? The nature of many businesses means that huge capital investment is rarely financed by equity: if the IPO is just to enrich the existing shareholders, is this good enough reason for you to buy?
Reset Restart is a funded programme of webinars and coaching to help new and small businesses recover. This is available in selected locations across the country, I am working with Rob Harrison from Glued with eligible businesses in Worcestershire. Over the next week I am coaching a range of businesses and also running a webinar on finance. Details at https://www.eventbrite.co.uk/e/finance-making-keeping-your-business-profitable-3-of-4-tickets-143695580349?aff=ebdssbonlinesearch
Business Ready is a scheme providing funded business support for high tech startups around Warwick University. I am delighted to be helping them with online learning sessions on Finance, Business Planning, Pitching for Finance, Risk Management and Negotiation. I am running session on Pitching for Finance on June 4th & 8th. Have a look at the link and find out more
https://www.business-ready.co.uk/events/ You may also be interested in joining the discussion on HR Hot Topics at 1.00pm on Friday 11th with CIPD Coventry & Warwickshire. I will be there with Sonia Khera from Cactus HR. https://www.eventbrite.co.uk/e/online-cipd-cov-warks-hr-hot-topics-networking-meeting-tickets-154829315651?aff=ebdsoporgprofile