Improve Your Marketing Budget ROI. Let Big Innovations Talent Objectively Uncover Ways to Realize MUCH More Bang for Those Bucks
- May 2, 2024
- The Big Innovations Team
- Portland, Oregon
Improving marketing return on investment is a great way to grow your business. Because marketing is THE catalyst of sales, enhanced marketing means increased revenue. Good applications also lend focus to the cost-side, trying to get more value out of each budget dollar you spend.
Increasing your top line and reducing the bottom line is otherwise known as profit margin expansion... always a crucial pursuit in any company. This kind of thrust yields the greatest gains when it has not been done in a while. New eyes & fresh minds will always spot new opportunities for ROI improvement. Try us!
KEY WAYS TO IMPROVE YOUR MARKETING BUDGET ROI
- an infusion of fresh marketing strategy & creative: all great marketing minds have a limit to their creativity and a finite scope of how they can position your offerings. Adding some "new blood" like BI- even on a temporary basis- brings new ideas, approaches and fresh creative to the mix. Interactions with new talent can revitalize your creative team and add new enthusiasm within the department. Fresh creative reinvigorates buyer interest, leading to added sales.
- an objective analysis of your marketing model end to end: the key word is objective, which is often best accomplished by professionals outside of your organization... as they won't be biased to the corporate view of things, nor pressured to see company issues & opportunities in only finite ways, etc. The analysis should cover every facet of your marketing function, considering every kind of contribution from your marketing team.
An objective, experienced team like BI will be able to recognize unoptimized activities, wasteful expenditures, untapped opportunities, holes in your marketing mix, etc. More importantly, we won't be afraid (for our jobs) to share them with you. We also provide specific, actionable recommendations on how to best address each observation. Plugging holes in a marketing mix drives near-term sales growth. - quality customer & competitor research: often overlooked or under-done, one of the most fundamental drivers of great marketing organizations is solid, ongoing customer & competitor research. Getting the company closer to its customers and leveraging "best of" innovations discovered by competitors is key to helping a company grow quickly and/or attain- OR MAINTAIN- a position of industry leadership.
BI offers an excellent model for this kind of research called collective brilliance. If your company hasn't done much customer & competitor research lately, you are certainly missing big growth opportunities. Quality marketing intelligence should drive marketing strategy & tactical execution. Otherwise, you have too much reliance on best-guessing, hope & luck. - Etc. There a many more.
There's too much at stake to employ a casino marketing model. Layer in a foundation of marketing science and it will re-focus creativity to pursuits with real upside.
The dominant key is more carefully considering how each marketing dollar is spent and how human resources supporting marketing strategy are utilized... in search of ways to get more out of both and/or mitigate "we've always done it that way" traditions that are now unproductive or even unprofitable.
- ALL companies accumulate inefficiencies with the passage of time and...
- ALL companies looking solely within (to themselves) for innovation are missing opportunities to grow now.
The first point is inevitable but the second is entirely within your control. Our team can help you with BOTH!
THREE GOOD EXAMPLES TO CONVEY SOME KEY POINTS...
A company sells informational products as booklets. Their influential leader bundled booklets into box sets believing that these bundles as complete sets would drive more sales. In time, new products were being developed to fill out new box set concepts and the product development function became increasingly demanding... and EXPENSIVE... its infrastructure growing ever larger, etc.
However, sales growth remained tepid. The company would always look impressive in corporate meetings by showing "pretty" new box sets in the pipeline and steady progress against a vision of building out a good number of box sets to fulfill a vision of having something to pitch to a multitude of predefined markets.
The problem: the bundle strategy didn't seem to be growing sales- only costs. The company couldn't allocate the resources to nail down the problem, so BI expertise was engaged.
Various forms of analysis revealed a very common occurrence at many companies: products were being developed for niche (or virtually nonexistent) markets...
Our analysis showed:
- About 25% of the individual products (components of box sets) had ZERO buyers (no unit sales at all), yet they required expensive ongoing maintenance and updates.
- Another 25% had a few buyers but not enough to be profitable... yet they too required maintenance and updates.
- Still another 20% had enough buyers to yield a little over break-even.
This left only 30% of the products actually yielding good profit.
Market wants or needs were not actually identified: this company was building products in search of willing buyers instead of the other, RIGHT way.
The company had allowed a strategy of building out unprofitable product lines to run for years before deciding to let us execute some OBJECTIVE analysis. The cumulative waste in those years was substantial: MANY MILLIONS OF DOLLARS.
We also found that some employees were well aware of at least parts of the problem. However, they were reluctant or afraid to speak up because of "focus on the positives" mandates and a culture of "just do your job" instead of welcoming collaborative contributions from ANY level.
RESULT: key recommendations included:
- pruning products that couldn't sustain themselves and focus on the products that were worthwhile,
- some new internal communication channels- including an anonymous suggestion box-type program- and encouraged changes to improve communications... especially from "front line" staff to decision-making executives,
- evolving to a find-the-market FIRST model of product development,
- and a number of smaller, tactical actions.
REVENUE & PROFIT QUICKLY SPIKED!
EXAMPLE #2: OBJECTIVELY DISCOVERING REVENUE BOOSTERS
A company had a selling strategy that solely relied on marketing efforts. They used only email promotions and some direct mail as their primary means of trying to proactively grow a base of subscribers. This worked OK and the company enjoyed their growth.
However, they recognized that the leaders of the space had a more effective pace of growth. They aspired to grow FASTER like them but couldn't nail down exactly how to do it. Company ego couldn't allow them to see those competitors in objective ways.
Our competitive analysis contrasted this company's sales model against those bigger, more successful peers, revealing many things competitors were doing differently than this client. Some differences were relatively unique, while others were prevalent across peer companies.
When competitive analysis of more successful peers shows a common practice not employed by a client, we see it like a strong current in a river. Their peers were going with a collectively-proven flow while our client was fighting that current.
Respecting ongoing competitor efforts to grow their businesses- something that is often challenging when insiders attempt to do this kind of work on their own- can motivate a shift in strategy to also go with the same, proven flow(s).
That kind of change will almost always yield an improvement in sales... often a short-term spike that will grow and grow as the new solution is refined.
In this case, one of the dominant currents we identified was that the competitors had telesales groups supporting their comparable marketing models. Our client was aware of this but imagined the cost of telesales as too expensive for their company.
There was also a self-defeating mentality among the executives: "I don't even take telemarketer calls" apparently implying that no one else would either.
The competition embracing it as a group strongly implied that telesales ROI worked: competitors would NOT choose to waste money if it was not profitable. The client was persuaded to TEST the telesales tactic.
While a few executives kept trying to resist, objective telesales tests outperformed marketing-only tests EVERY time. For doubters, objective tests were re-run. For lingering doubters who seemed to simply NOT want to change, tests were re-run again. There were randomization variables applied to remove any room for result bias. Eventually, even the most stubborn mind must concede to a classic: "Numbers do not lie."
RESULT: They embraced a tactic obviously successful for those bigger competitors. SALES WOULD QUADRUPLE IN ONLY 2 YEARS.
EXAMPLE #3: GROWING SALES TEAM PRODUCTIVITY
A company had a sales team with some super-performers, a group of average performers and another group of under-performers. The super-performers appeared to have no special advantages over the other groups, and the company was puzzled at the wide discrepancy in revenue-per-salesperson. After "We've tried everything to figure this out" best efforts, they turned to BI.
We analyzed their marketing & sales model and identified a good number of issues & opportunities. Some were:
- fundamental: a need for dedicated cross-training so that super-performer tactics could actually be shared with the rest of the team.
- hidden: the new lead gatekeepers who filtered prospects were over-feeding hotter prospects to the supers... because the gatekeepers had incentives to get sales today. The reward system had them giving better leads to certain people. And it was out of hand.
- structural, overcoming competitive animosity & isolationism issues by establishing territories, so that salespeople would stop stepping on each other's toes. Less infighting means more teamwork.
Result: we shared actionable recommendations to resolve the fundamental, hidden and structural issues... even helping with implementation & rollout of some of those solutions. There is still a range of better and weaker performers- there always is in sales departments- but those groupings are not always populated with the SAME people month-after-month, the top-to-bottom (performance) range is not a wide as it was before and the sales team as a whole- significantly increased their productivity... which was the primary objective.
While their issues & opportunities were relatively plentiful...
Even modest improvements to salesperson ROI can be FAR-REACHING... and up to FOREVER. We are very good at seeing the unseen & recommending evolutionary innovations to drive more sales.
A second BIG lesson in this one is that even in "We've tried everything" scenarios, fresh, objective eyes will see things differently. Even the biggest insider brains can have some clouded lenses by company culture, politics and other variables. Consultants can shine because they come in with no established bias, no perception of how things have always been done, etc. We automatically see things differently.
OVERCOME BUSINESS BOTTLENECKS TO IMPROVE MARKETING ROI
There are many other examples of our own abilities. But we'll close this article with one more biggie...
One of the most common ones in nearly every engagement is identifying bottlenecks within sales & marketing models... something much easier to do- AND BRING ATTENTION TO- as objective outsiders than can often be addressed within.
For example, we've had a number of clients whose otherwise efficient marketing models would lock up because a lone person had to be the sole owner of some human touchpoint piece(s) of a process. A frequent one in marketing models is reviewing creative.
If the bottlenecks take a vacation, have some sick days, etc, company marketing models could seize up, wasting resources until he or she could return. That's the great catch with bottlenecks: if it can only move forward WITH them, it moves NOWHERE without them.
The obvious solution is to identify these bottleneck situations and illustrate their negative (very costly) impacts. Done well, it can motivate those responsible to basically get out of their own way and allow others to cover those particular functions. On recommendation implementation, those structural & process bottlenecks disappear and marketing and/or sales models become MUCH MORE EFFECTIVE.
Often human bottlenecks are managers- or even company founders- who feel a need to completely own certain tasks. While that might have worked when the company was smaller and they HAD to be THE ONE to do whatever it is...
Company growth always demands delegation of responsibility to keep the evolving engine running smoothly.
Those employees who can recognize the bottlenecks internally may not feel secure enough to bring them out into the open, especially when their boss or higher IS the bottleneck. Or cultural pressures, ego, etc, may motivate the manager/owner to refuse to let go of some task(s) believing that only THEY can do it right. We have seen this exact stance MANY times.
Often, installing a formal strategic planning process can cure many of these kinds of issues. Strategic plans can give the "control freak" owner or manager(s) that strong sense of still directing the company while also encouraging them to delegate away responsibilities that should no longer depend on only them. Their ego can still get fed what it needs- they still OWN the all-important role of LEADING the business...
but now the company can grow beyond the hard cap of their own personal production... especially when that comes to nitty-gritty tasks they should have delegated to others some time ago.
The reward? GREATER SUCCESS!
Every parent eventually realizes that they must let their "baby" grow up, stand on it's own two feet and become a productive contributor beyond what that parent can do FOR them. Company leadership must follow that same metaphor. Bottlenecks are generally "parents" fighting to prevent their "baby" from becoming something beyond the parent's control. However, if they've been a good "parent" (leader) equipping that "baby" (their team) for success without them, the result tends to far exceed clinging to some task or role.
A team like BI doesn't have a job at stake nor are we influenced by politics or "we've always done it that way" traditions. We are free to see situations like these clearly, document them, value their positive or negative impacts and recommend actionable solutions. We have NEVER stepped into a situation where there were NOT lots of opportunities to make meaningful, actionable recommendations that lead to major gains. It is a direct catalyst to how we got our company name. Try us and see for yourself.
