Thursday, January 3, 2013

Why you should be spending more on marketing

Time to brighten up your marketing?
If you want to grow your business it’s time to boost your investment in marketing.

There’s a rule that generally works: the more you promote your firm or your products, the more you sell.

The tricky bit is finding the sweet spot, where you’re getting the maximum return on your marketing spend. Lots of businesses have lost money through advertising that generated sales, but did not make enough profits to cover the cost of the campaign.

Fearful of losing money, many businesses go the other way, particularly during tough times. They cut their marketing budget to save money, without really understanding the impact the reduction is having on their profits.

Top entrepreneurs spend more on marketing

There’s no shortage of research that describes the success of firms that invested in marketing during earlier recessions. The same message also comes through from practical experience.

Aamir Ahad is one of the UK’s new entrepreneurs. He founded furniture retailer Dwell in 2003, armed with experience from a previous business failure.

Ahad says: “At the start of the recession we had it tough. Like many companies, we cut back on our marketing when we should have been ramping it up. When we realised our mistake, we doubled our marketing spend and investment in new product development and stores, and that saved us.”

Since then, Dwell has grown by 40%. It’s one of the UK’s fastest growing retailers, with stores across the country and turnover of £35m.

Take the opportunity to grow market share

Whether you’re a sole trader, a local company or a regional business, you’ll get more trade if you have a bigger slice of your marketplace. Firms who do more to market themselves during a recession find it easier to grow their portion of the market because many of their competitors are doing just the opposite - cutting their marketing.

Growing your market share during a recession also puts you in a better position to have a large piece of the market in the good times that will follow.

It’s important to remember that marketing is more than just advertising. It’s also about understanding what your customers want from you and building positive relationships with them. Exactly how that works will vary from one type of business.

Finding the right approach to marketing your firm will help you to secure success in the future.