HFTB Marketing Blog

image by Joe Shlabotnik

Your price, whether you sell a product or service, is most likely based on the costs you pay to produce the product or deliver the service… plus your margin obviously. You have to make a margin, right?

But what goes into your margin? There may be more than you think. In fact, there is often a hidden component that instead of boosting your bottom line, may eventually cost you your entire sale.

Rohit Bhargava has an interesting post on his Influential Marketing blog about a related concept – making your price less expensive to your customers without reducing your monetary price. His point is that there are things we can do to make our services or products less expensive for customers (without reducing the actual monetary price they pay) through what I would term, business process improvements.

The idea makes a lot of sense. After all, we’ve all dealt with unresponsive sales people, poorly designed websites and less than helpful customer service departments. What do all these things have in common? They waste our time. They also make the product or service relatively more expensive.

It’s important to take a long look at the product or service you provide and ask yourself, “What can we do to make our customer interactions and relationships less expensive… for our customers?” I’m not talking about your price. Look more closely at the markup that isn’t seen in what you charge. The markup that includes waiting time, unanswered calls and delayed shipments, to name a few.

The worst part of this unseen markup is that no one gets the benefit. It simply evaporates without lending value to your customer or dollars to your bottom line.

But don’t be fooled. Customers will feel the markup. They may not think of it in terms of an added margin on your services. But they will notice unneeded conference calls, late deliverables and unfulfilled promises. The result, a wandering eye for other service providers that might not be quite as inefficient in managing their time as are you.

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Marketing customer relationships, Marketing, marketing communications, optimize websites, traditional marketing

In a post last week I noted that many are shifting away from traditional marketing tactics in favor of online or “new” marketing tools in response to the economic downturn.  The thinking is that with less of a marketing spend companies can increase, or at least maintain sales through online channels.

Maybe.  But I would argue that to effectively leverage online efforts, companies must build their presence over time rather than simply shift to digital media tactics as a result of budget cuts today.  This is along the lines of the old “dig your well before you’re thirsty” idea.

Great chart on Sherpa that shows in some detail the apparent shift.  The accompanying article elaborates on the findings.

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New Marketing, Social Media digital media tactics, economic downturn, marketing in down economy, marketing spend, New Marketing, online efforts, Online marketing, sales, traditional marketing, traditional marketing tactics

Why shifting away from traditional marketing might not be the answer… at least right away

A question came up the other day in a discussion with a colleague.

My friend made the point that in difficult economic times, companies typically start to focus more on less expensive marketing options. And with the increasing popularity of online marketing, this is a time in which many businesses should consider switching away from some of the traditional marketing tools in favor of lower cost online marketing channels.

He was speaking more specifically about product launches, but the point is applicable to other marketing activities as well.

So is this the time to switch your marketing activities online?

My answer… yes and no. Here’s why.

One important distinction that companies looking to either increase their online presence or merely begin to leverage online marketing need to understand is that product launch or other marketing initiative, cultivating an online presence is a process rather than an immediate remedy.

In slow economic times it makes sense to look for more efficient uses of your marketing dollars. But looking to increase efficiency is different than looking to simply reduce expenditure.

We often hear about low-cost (or lower cost) online marketing. I would make the case that a successful online marketing presence might be lower cost than cash outflows to traditional marketing expenditures, but what you save on one side you will probably spend in other areas (at least in the short term).

In other words, the process here involves dedicating resources to creating, cultivating and maintaining and ongoing effort in the online space (blogs, social networks, etc.). And results are not by any means quick or assured.

This is a commitment that companies must make over the long term involving candid and honest direct communication with their customers or target market. Management looking for a quick fix or next quarter results directly attributable to your blogging or social media efforts might want to explore other options.

That having been said, the inevitable question of justifiable ROI always rears its ugly, yet understandable, head. What case can be made to management more comfortable with traditional and more measurable marketing tactics? Great video here from David Meerman Scott on the answer to the ROI question – How do I convince my boss of the ROI of new marketing?

Finally, it is important to understand that online channels should not replace traditional marketing tools, but augment them. Consistency of message is key here.

Your brand or product message and image should be consistent across all channels – online and off. Nothing will kill a product launch quicker than telling your target market your product is something it isn’t. The online audience is particularly sensitive to these types of false claims. And conflicting messaging or misrepresentation of a product can be very difficult to recover from.

Once again, businesses need to focus on candid and open communication in the online space over the long term. Sometimes you might not like what you hear, but what a great way to understand and then work to address the issue or improve the product offering.

So yes, now is a great opportunity to move more deeply into the “new marketing” world. But should this come at the expense of other traditional techniques? Not to the extent that you stop using those traditional tools that have been successful in the past just because they are initially more expensive.

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New Marketing, Social Media down economy, marketing in a recession, Online marketing, online presence, recession, shift to online marketing, traditional marketing