It doesn't matter what you sell,
every company has to worry about the fine line that separates good investments
from bad. Transportation costs, manufacturing costs, employee salaries, and numerous
other factors have to be considered in relation to the overall positive contributions
the expenditures make to the bottom line.
One of the most elusive factors in the business formula as far as analyzing
cost and effect is determining the overall value of marketing efforts for your
business. In some businesses this is actually quite simple. Say a real estate agent for example. He or she
will either succeed with their efforts regarding a home sale or they will not. In other industries, however, the end result of marketing efforts
might not be so clear.
Because of the difficulty most companies have in determining whether or not
marketing is successful, many are reluctant to spend the money necessary in
order to make a marketing campaign truly work. Internet advertising is a great
example of this. Many businesses recognize the value of having a presence on
the World Wide Web, but they balk at some of the steps needed in order to make
their page truly work. They fail to put up relevant content, regular updates,
and put in the effort to link, and then wonder why their printing company
does not realize the profit from the site they thought it would.
The above illustration is a perfect example of what can happen when a company
relies on in house efforts to run their marketing campaign. Often, in house
attempts are made for one simple reason: to keep costs down.
That reason can be quite misleading. While it is true that you will not have
to pay a marketing specialist a couple of hundred dollars a month to run a good
campaign, concentrating efforts in house may end up costing you just as much.
Shifting the work over to a current employee, or even yourself, will mean that
the hours spent working on the campaign are ones not spent on the actual business
of the company. Either more help will have to be hired, or the employee will
have to be paid for more hours. This is in addition to the profits which may
be lost as the in house person concentrates on marketing rather than actual
Using in house marketing can also be detrimental to the company's efforts
because of a lack of expertise. Employees, management, and ownership often believe
that because they know the company's business best, they know the best
ways to promote it. This, however, is not always the case. For example, successfully
marketing a business which exchanges money for gold jewelry means understanding
more than current market rates. It also means the marketer has to understand
demographics, different advertising mediums, and most of all market psychology.
Few employees or owners could offer such a diverse range of skill sets.
Most businesses will find that they have the budget to be able to afford marketing
specialists within their niches. Restaurants can use the help of PR companies
to boost guest numbers, lawyers can use media to find clients, and so on. When
making the decision to hire or work in house in order to promote a business,
the most important question to ask is not how much you know about your business,
but how much you know about the business of marketing.
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