I stepped out of a meeting not long ago with a prospective client who wouldn’t move off a price objection for investing in an inbound marketing program for his business no matter how hard we tried.
When we got down to the pricing conversation and discussed our recommendation for his business and his growth objectives, he calmly said, “for what you are asking me to spend on your services I could buy a new truck for my business.”
“At least with a truck, I know what I would be getting for my money.”
It’s not that this gentleman was particularly interested in purchasing a truck, or needed one to grow his business. Nor was he operating with a sophisticated marketing game plan. In fact, he didn’t really have one outside of networking with centers of influence.
At that moment, he just didn’t perceive the value of a marketing plan or our services. He had built his business off hard work, sweat and word of mouth networking and was comfortable with the status quo.
He’s not alone!
Why SMBs Don’t Invest in Marketing
Seasoned Fortune 500 companies have a deep understanding and appreciation for marketing. Companies like Microsoft, Ford and Coca Cola are some of the most recognizable brands in the world, but they still allocate a sizable amount of their annual budget to marketing.
Just look at the cost of a Super Bowl ad………… a record $2.5 million for a 30-second ad in 2017.
Companies that are in the startup or early phase of the growth cycle also invest in marketing, to grow their companies to move out of the survival stage.
Between the super large and micro companies there lies a vast middle ground of SMB’s (small and mid-sized businesses) that make a few million dollars per year or more. However, one of the interesting things that happens to MANY of these companies is that they either forget about marketing, or do not value the role of marketing to grow their companies.
Why is this?
Sometimes they dabble in marketing programs run by small inexperienced marketing outfits, don’t see positive results and declare……… “I’m not doing that again!”
Sometimes, things get busy, and it’s tempting to let things slide, or sometimes things are going well and these companies stop marketing altogether, thinking they have it made.
Whatever the reason, SMB’s are reluctant to spend on marketing.
A joint survey conducted by Bright Local and Chamber of Commerce.com interviewed 700 business owners about their marketing spend. Here are some of the interesting findings from the report.
- The average spend on marketing by SMBs is $400/month.
- 32% of SMBs are spending less than $100/month on marketing their businesses.
- Just 6% spend more than $1,000/month.
“Many SMBs are conservative in their attitudes and willingness to spend on marketing. They spend sparingly and cautiously, and many don’t have a fixed or dedicated marketing budget.” (Source: Search Engine Land)
Stuck in a Rut
Failing to invest in marketing is a dangerous strategy, and it’s one of the reasons so many otherwise successful businesses wind up failing in the long run.
WITHOUT MARKETING, your business will eventually plateau, IF YOU’RE LUCKY.
It may not be today, nor tomorrow, but someday your business will stop growing and you will be stuck in a rut with few to no new prospects, a dried-up business model and if you’re like MOST companies, saddled with a ton of overhead like rent, payroll and maintenance for depreciating assets like TRUCKS.
Business guru Peter Drucker once said:
“Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”
Innovation is the fun side of the business. Developing new products or tweaking your service model is where most business owners focus their attention and their investment, but as Drucker says the role of the organization is to create a customer. No matter how great your product or service is, if people can’t find you, they won't buy from you.
If NOT ENOUGH customers are buying from you, your business will be in trouble.
Should you use the old tactics to grow your business? Or should you look at why should I hire a marketing agency for my small business? You might find the answers surprising.
Invest in Marketing
Companies like our example at the beginning of the post can no longer rely solely on word of mouth marketing to find customers.
For better or worse, the rise of internet search engines and their lightning fast ability to sift through mountains of data has changed the rules of the game.
Digital marketing assets such as company websites, blogs and social media channels to market your B2B business are required for business survival NOW and in the future.
Investing in a truck and investing in marketing should not be mutually exclusive expenditures. There are times when you need a new truck to keep your business humming, but marketing is something you need all day, every day.
Marketing is the regular, sustained activity that gets your business where you want it—and keeps it there. Your marketing program needs to be operational 24/7/365.
Investing in it helps pay your rent, sustains your employees and creates value for your organization and in the case of this customer would actually pay for his truck…….many times over.
The BIG GUYS who for all intents and purposes have made it, spend big bucks on marketing.
Because, successful companies never stop marketing.
Image Credit: Photo by Bre LaRow | CC BY
David, a HubSpot Certified Inbound Marketer is the Chief Content Creator for InTouch Marketing and its clients.