It’s all too familiar in a stagnating economy:
- Your business’ revenue is down.
- Earnings are taking a beating.
- With no end to the decline in sight, it’s easy to panic.
Most industries are feeling the pinch, and many are caught in a struggle for survival. Usually, the first two budget cuts are Marketing and Training. Human resources follow swiftly on the chopping block.
To cut marketing when the chips are down is rarely the best strategy – an article for another day, though.
The pressure is on to reach sales targets and deliver a financial return on your marketing efforts before the fiscal quarter is out or heads will roll. Yours first.
To add insult to injury, a brilliant salesman on YouTube, at a conference or family braai has just convinced your CEO about this shiny new “thing” in Marketing. It is often a new channel, application, platform or tool that will increase company revenue by a gazillion per cent in three days flat. The salesman even had a case study to prove it. Charming fellow.
You only have to sign-up—the pressure mounts.
The scene is set for changing your current marketing plan trajectory, and everything brand-related should or has to change as well. In the process, you possibly may be throwing the baby out with the bathwater. Dangerous waters to dabble.
The problem with instant gratification and short term focus is twofold:
1. You might get caught in a vicious cycle of chasing your tail if activities aimed solely at monthly sales targets take the brunt of your marketing effort. Focussing only on short term revenue means that next month you will have to start from scratch again. The month after. Groundhog Day, or month for that matter. With no brand-building done, the same effort has the same result with little to no brand growth prospects. Until, of course, Google Ads changes their algorithms, or a competitor does the same thing better and faster with more money, and the whole house of cards comes crashing down. Before you can catch your breath, you are working harder, and stressing more just to “pay the bills” come month-end.
Short-termism has the risk of commoditising your offering, which in turn leaves you vulnerable to price wars, general nit-picking and becoming the dreaded third quote. In the end, you’re reducing yourself to become a “me too” brand and the big dream of being relevant, needed, and the go-to place for your target market lies in tatters. To top this off, what happens if you compete on price, and you end up being second cheapest?
2. There simply is no silver bullet for marketing, and continually looking for one could severely weaken your brand and mess with your reputation and brand positioning. In its purest form, the marketing-branding-sales-function is still a complex machine of multiple parts that need to work together seamlessly to deliver on its ultimate goal: a return on marketing investment and business growth. And good luck trying to accomplish that without a smart brand strategy, balanced tactical plans (which may or may not include shiny things here and there) combined with a rock-solid reputation, built by consistency, in an ever-changing world.
When you remove the rose-coloured glasses that come with shiny new things, that magical unicorn might reveal itself to be a donkey.
The latest findings of a long-standing research study of the Institute of Practitioners in Advertising recommend that organisations should spend 60% of their budget on long-term brand building tactics, and 40% on short-term activities or activations. This budget allocation will deliver the most optimal return on marketing investment (ROMI) possible (Peter Field and Les Binet).
Even 70-year old multinational super-brand, Adidas, has recently announced that they are moving away from short-termism to a better balance. Speaking to Marketing Week in May 2019, global brand director, Simon Peel said: “Short-termism is always going to exist but what we’re trying to do is to make sure that while we’re doing that, we also look after the long term health of the brand and know that behind those short term deliveries, the brand is one that ultimately delivers against them.”
When all is said and done, if you spend effort looking after your brand, reaching sales targets becomes more achievable over time. Your brand will be far more robust and consistent in difficult times and sustainable growth with a positive return on marketing investment has a considerably better chance.
