Articles
The high cost of failing to market
by John Graham“We had to stop the mailings to our hospitality database,” said
Tom Helbach, president of Mosinee Insurance Agency in Wisconsin. “We
were getting so many calls we couldn’t process the work efficiently
until we made some internal changes.”
Marketing gives Mosinee Insurance a statewide reach and allows it to compete
successfully against an association-endorsed insurance program. The next step
is to begin marketing in neighboring states.
But this isn’t all. This marketing strategy demolishes the myth that companies
only want to do business locally.
And it’s also true this marketing initiative––as well as others––costs
money. But business is coming to Mosinee Insurance without face-to-face
calls. It costs money but it’s also efficient and effective.
What Mosinee Insurance Agency is doing is just one example, but it illustrates
the benefits of a marketing-driven strategy vs. one that’s sales-driven.
In spite of those who claim “marketing costs too much,” here are
four major reasons why just the opposite is true:
•
Marketing bulletproofs a business against competitive attack. Most
companies don’t give marketing serious attention until something
goes wrong. It may the activity of an aggressive competitor, falling sales
or some internal crisis. Then everyone expects marketing to kick in instantly
and solve the problem.
Companies––all companies––are vulnerable to competitor
attack when they fail to create a legacy of marketplace credibility. This means
projecting and protecting the company image and constantly caring for the way
the brand is perceived and appreciated. This takes time, effort and money. But
when a problem arises––and it always does––there’s
a reservoir of goodwill, knowledge and value that offers protection against the
attack.
The hundreds of millions of dollars that tobacco companies are committing to
smoking education aren’t at cross-purposes with selling cigarettes. Those
sales are far less important than having these corporations viewed by the public
as responsive and responsible, thus helping to mitigate possible legal, legislative
and regulatory action.
• Marketing creates a company’s future. When
someone calls and says,
“I’ve known about you for years,” you know that marketing
has been at work doing its most important job. Here’s what effective
marketing contributes to a company’s success: Before customers
make the decision to buy, they must make the decision to go to you.
The marketing objective is to help customers form the picture in their
minds that you are the right company to do business with.
Behind all this stands a carefully designed and thoughtfully implemented marketing
program with one aim: At the moment of need, the customer either seeks you
out or welcomes your call.
Today, we are seeing many companies that have been in business but are now in
decline. Why? In some cases, their customers have closed their doors, merged
or been acquired. Or, new competitors have entered the market and grabbed their
accounts. And quite possibly, the “inside” customers who knew them
so well––buyers, purchasing agents, managers––have gone
elsewhere or retired.
Unless a company is actively prospecting two to 10 years in advance, it will
find itself always pushing for sales!
• Marketing makes selling easier. If customers have
a positive predisposition toward doing business with your company, product
or service, making the sale is simply easier. This makes it possible for
the salesperson to be a consultant (and not just to call himself one).
Such common selling issues as overcoming objectives and closing techniques
become irrelevant. In fact, relying on “selling skills” to
get the order is an indication that a company has no marketing.
Everyone in business receives calls that start out something like this.
“A couple of weeks ago, I sent you information about our company….”
This is a call that goes nowhere today! Of course, salespeople (very good
ones, too) run from such antiquated and stifling working conditions.
Trying to make the sale when prospects lack a clear understanding of why it’s
in their best interest to talk to you is a waste of a company’s resources––time,
personnel and money. Jacking up commissions or lowering the price only drives
up the cost even higher.
The role of marketing is to create the right environment for selling
to be successful. Without it, the cost of doing business is too high.
•
Marketing extends your reach. Whether it’s drilling down
into existing companies to find new opportunities, further penetrating
a market or market area, or opening the door to new markets and new territories,
marketing is the engine that drives the effort.
To grow a business today, the task is one of going from “everybody-knows-us”
to “nobody knows us.” Few companies are willing to acknowledge
the height of the wall this creates for anyone in sales. Firms enter a
new market where they’re not known and then wonder why sales lag.
More often than not, it’s the sales force that gets the blame for
the debacle, even though the fault was a lack of marketing.
Onstar is an example of a company that literally drove customers to GM dealers.
They have created demand for the product. Motion pictures are pitched the same
way––“Coming in October.”
Here’s the message: It’s failing to market that’s too costly. The
bottom line value of marketing becomes clear when you take into account these
three factors: sales that are going to a better-known (but not necessarily more
competent) competitor, sales opportunities that are missed because you are unaware
they even exist, and thin-margin sales that are being made to save accounts or “get
in the door.”
The money is going out the door now. The goal of marketing is to keep it where
it belongs––on the books.
John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He is the author of The New Magnet Marketing and Break the Rules Selling, writes for a variety of business publications, and speaks on business, marketing and sales issues. Contact him at 40 Oval Road, Quincy, MA 02170; 617-328-0069; jgraham@grahamcomm.com.