Getting a return on your marketing investment
– or how to turn your ‘wish list’ into action
By Paul Griffith and Victoria Ash
Whether you regard them as a necessary evil or central to the future of your company, marketing and business development represent a significant investment of cash and time for most businesses. Yet most of us would probably agree that we could get a better return from that investment.
A decade ago, we did some research among professional service firms (PSFs) as to why budgets were being wasted. Our interviews with around 30 managing or marketing partners and marketing professionals suggested that most had identified their own shortcomings and the need to change their approach in order to achieve better return on investment (ROI). Yet few of them were making good on their intentions and, ten years on, our experience of working with and talking to a wide cross-section of businesses in all kinds of sectors suggests that those challenges are still widespread, and not just among PSFs.
Our experience shows that there are five key areas that determine the effectiveness of a firm’s marketing and business development:
- internal organisation
- motivating owners and staff
- the right support
- client focus
Organisation is the area where most businesses do best. The majority recognise the key role that owners, directors and staff must play in growing revenue, and they’ve organised themselves into small groups that provide mutual support without being unwieldy. Large groups tend to hinder decision-making while motivation tends to be low among individuals working alone, and many firms have taken this on board.
However, when it comes to developing realistic marketing plans, a different picture emerges. For many organisations it seems that their plans bear little relation to the reality of day-to-day activity, largely because they have too many intentions and they don’t set measurable objectives. Ten years ago, 60 per cent in our survey said that they were unable to measure the effectiveness of their marketing; we don’t think this has changed significantly.
The other main reason why plans are unrealistic is a failure by a vast majority of businesses to estimate the time required to achieve their objectives. People commit themselves (and others) to actions without being honest about whether they have time to do them. Most firms will have a clearly defined cash budget for marketing but the scarcest resource is often individuals’ time. The majority, however, don’t even know how much time their people are spending on marketing and business development, and most do not give guidance on what is expected.
Good intentions also often fail to materialise due to lack of motivation – and in large part this is down to two things: a failure to keep plans ‘live’, and inadequate links to remuneration.
On the planning front what often happens is that plans are created once a year, shoved in a drawer and forgotten: a minority of companies produce plans that are regularly reviewed and updated, and very few carry this through to individual level and create personal marketing plans with directors or senior managers, so that they have a clear understanding of their responsibilities and commitments.
Our experience also suggests that other key motivational factors are a link between business development and remuneration, and regular progress reviews. The majority of firms do evaluate key individuals’ contributions in some way but the impact on remuneration is far from clear, and most reviews are irregular.
There is also a huge variation between the levels of support provided. When time is limited it makes sense to help your people make best use of the hours they do spend on revenue development, for example by getting them to focus on developing one-to-one relationships with clients and contacts, and letting the marketing team focus on other areas of activity.
We also firmly believe that it’s hard to get motivated if something feels challenging, new or difficult. Marketing and business development don’t come as second nature to most of us and yet few firms provide formal training, coaching or mentoring.
Finally, we encourage firms to evaluate the client focus in their marketing. By organising marketing around issues of importance to clients (rather than what matters to you!), firms can ensure that their marketing stands out from the crowd and consequently gets more ‘buy-in’ across the board. Most companies say they do this, but how many actually interview their clients to understand the issues facing their businesses?
Five suggestions for change
So what can ambitious businesses do to get a better return from their investments? We advocate five steps that firms can take to improve their marketing effectiveness.
- Organise yourselves into small teams (three or four people) with very specific objectives, such as growing the revenue from a short list of key clients, or developing new business in a particular sector. Start with a few keen groups rather than forcing this on everyone, and involve senior management if possible in a pilot project. If necessary, provide them with external coaches or mentors to help them focus, keep the momentum up and keep them ‘honest’.
- Be realistic about what you can achieve: aim to do less if necessary but make sure it happens. Successful individuals can usually sum up what they have committed to do on the marketing front in the next quarter on half a sheet of A4, and while it may take some time to achieve consensus on priorities, it’s worth investing the effort. On the issue of time, give people a ‘budget’ and do estimate the hours required for implementing activities – it will ensure marketing plans are much more realistic.
- Find ways of keeping your marketing plan ‘live’. We often suggest you only plan in detail on a three month rolling basis, as any detail beyond that time frame is likely to change. It’s also worth extending planning to the individual level so that responsibilities are clear. Set measurable objectives and get management and peer groups to review progress on a four to six weekly basis. Firms should also think about how your remuneration structures reward contributions to growing revenue.
- Review the kind of support that you provide to directors and managers. Most of their business development time should be spent at the ‘coal face’ of one-to-one relationship building, but this isn’t second nature for many so it may be worth considering structured training or mentoring, plus more support for activities like research, list building, writing articles and event organisation.
- Finally, make your marketing client-centric. Carry out external research, however informally, to challenge the “we know what our clients think” ethos. Sometimes, just sometimes, your colleagues might be wrong on this and once research is done it can be a powerful motivator for change! What’s more, researching clients’ business issues gives everyone better market intelligence and an excuse to get in touch with clients and prospects.
Most business owners and managers aren’t short on ideas, and many are enthusiastic about building revenue. By being more focused about what you do and how you do it, it should be easier to make good on your marketing intentions.
Do you receive our Marketing Intelligence?
Have a look at our blog to be kept up to date with marketing strategies and tips, whilst being kept in the loop about what we are up to and our upcoming events!
Don’t forget to subscribe to receive our blog directly in your email inbox every week. You may also wish to receive our newsletter every month or so for more in-depth news and tips.