In today’s ever-evolving business landscape, many things are changing how businesses secure new revenue and build a solid business – but at the end of the day the most important factor is still marketing. Oddly, marketing is being ignored more today by new businesses, than any other business aspect. A recent CB Insights study showed the greatest factors for why businesses fail are all tied directly to marketing.
One major factor is that most companies do not understand the true scope and impact of marketing. Many simply view marketing as an activity to be conducted after the service is finalized and ready for customers and the doors are open. When pushed, most companies will say their marketing will simply consist of some social media posts. This classically falls into the “Build it and (t)he(y) will come” strategy, which eventually leads to a significant loss of investment or an inability to attract a large enough customer base – both paths leading to business failure.
Marketing is a foundational business strategy that starts with determining the market need (does it really exist), size and proper pricing models. These aspects must be reviewed and researched before a company can move into the next step of building brand awareness – the single most important facet to generating sales.
While brand awareness is so important to building a successful company, many companies struggle with determining how much to spend. The growing idea of bootstrapping has led many to think that the brand-building side of marketing isn’t that important or difficult because they really believe in their service, which is important but few in the actual market will share that passion – especially if they never learn of the company in the first place.
If you have a major problem, you need a major fix. You wouldn’t try to solve a crumbling foundation on a $5M home with a contractor charging $5K. Likewise, you wouldn’t buy a $5K computer just to send an email. Major problems require major fixes, and minor problems require minor fixes.
This is where you base your budget. If you COULD be selling $1M more each year if everyone knew your company, then 10% is a reasonable amount for marketing. Nearly everyone would invest $100K to make a million more in revenue. Now the good news – good, boutique marketing firms today can provide that level of service for as low as 5% — take advantage and grow.