According to the Small Business Administration, 70 percent of businesses cease to exist within 10 years of launch. Why do businesses fail? Misuse of resources.
Branding and marketing are often disciplines in which companies misuse their resources. Six-Point has tips for growth-minded companies looking to optimize branding and marketing resources.
I was sitting at a full day workshop…in a session on sales, I believe…and my mind was wandering a bit (as it is apt to do in sessions on sales). All of a sudden, the speaker snapped me back to attention with a simple question: “Why do businesses fail?”
These days, especially with this weird (IMHO) zeitgeist that is the “cult of the entrepreneur,” we rarely talk about businesses failing. We talk about unicorns and angels. We talk about IPOs and VC. But why businesses fail? That is not a question I hear asked much, even though it is much more common than those rare successes.
After many guesses from the room (cash flow, profitability, revenue, wrong people wrong seats), the speaker said, simply: Misuse of resources.
The answer hit me in the gut. Because there is never enough for everything that we want to accomplish. Never enough money. Never enough people. Certainly never enough time. If we just had a little more — oh the things we could achieve!
But the truth is, all businesses, all people, have limited resources. And stewardship of those resources needs to be paramount.
Since hearing that statement, I have been making decisions differently about my own business — not out of a sense of scarcity — but out of a sense of stewardship. Our resources are limited. Our ideas and needs and potential for impact are myriad. Waste is not an option.
Of course, I’m not an operations or HR consultant, so I’ll bring this back to what I know.
Here are a few tips to help eliminate waste in your branding and marketing budget:
- Develop a budget with a 60/40 split between branding and lead generation over a 3-5 year span. The IPA, an international trade association dedicated to marketing effectiveness, has done studies over the past two decades that continue to reinforce that this is the ideal mix for long-term return on investment. Too much in branding, and you can’t generate enough short-term sales to feed operations. Too much in lead generation and you are on a treadmill that you can never get off — with no equity being built in your customers’ minds, and no weapon to battle against the pressure to lower prices.
- Concentrate investment in high impact customer touchpoints. Brand experiences that are highly personal and either very frequent or long-lasting have the strongest neurological imprint on your customers. For example, customer service calls, in-person sales presentations, and the packaging of products ordered online are all opportunities to make a high impact brand impression. Therefore, ensure that anything which involves another human being and takes place more than 12x per year or for more than 10 minutes gets extra attention to the impression it is making. Is it doing everything it can to generate the right conversations about your company? How could you make it more impactful?
- Question the “must-haves.” Chances are, the way the business got to where it is now is not what is going to get you to the next level. Whether in staffing your marketing team, or the “must-go” trade show, or the critical brochure your sales team says they can’t live without — now is the time to question absolutes. What ineffective expenditures are you tolerating because it would cause too much emotional pain or staff blowback to cut them? Challenge your team and your agency to come up with a more effective solution within the existing budget. How can they do more with the same resources?
- A note of inspiration: There is a common business school exercise where teams are given $5 (or $100, or any given amount) and asked to maximize return within a certain time. The teams that do the best are most often the ones who don’t even use the money. Instead, they think up creative ways to avoid limitations of time and money. Here is one story of this exercise.
Sure, more resources might help you grow, but waste can kill your business. Let’s concentrate on maximizing what we have before we spend time wishing for more.