Starting a business almost always involves getting into some debt. Even doctors usually lease-to-own their equipment, while they pay back thousands of dollars in student debt, and they are still among the highest paid professionals in America. After all, the old business adage goes, “You have to spend money to make money.”
But if you find yourself in the red, with trouble meeting financial obligations, you may be spending unnecessarily on marketing. Here’s how to cut down on marketing debt, make your advertising and marketing dollars really work for you, and get out of the red in 2018.
Now there’s a worthwhile New Year’s resolution.
Do What You Can, But Not What You Shouldn’t
When it comes to making financial decisions, particularly as it relates to outsourcing work, there’s a two-part analysis to do: what you have the skillset for and what something actually costs.
Here’s a helpful breakdown:
- What do you want to bring in this year?
- Divide that by 52 weeks. That’s what you’ll need to pull in each week.
- Divide that by 40 hours (even if you often work more)…that’s a way to value each of your hours.
When you look at it that way, the cost, in terms of your time, to update your social media accounts, post relevant online content to generate SEO, send direct marketing emails, or many other marketing functions, just might not be worth it. (More on how to value those marketing functions later).
Keep in mind that money is a renewable resource, but time is not–you can make more money, but you can’t get back the time that is spent.
Even if you know how to do all of those marketing functions, looking at it that way can help you determine if it is worth it. The second part of the analysis is, there may be things you do not know how to do. For those, it may be worth hiring an outside resource as well…but more on how to calculate the value of those marketing functions next.
Statistics and Decision Making: the Value of Marketing
If you want to reduce marketing expenses, it’s also crucial that you know which marketing techniques are paying off and which ones are unnecessary expenses. That’s where statistics in business decision-making come in. Common mistakes in business statistics include:
- Not having statistics
- Not having the right statistics
- Not knowing how to analyze those statistics
- Not making decisions based on statistics
When it comes to marketing, decisions are also often made in a knee-jerk fashion, or with too hands-off of an approach: hiring a marketing firm, for an outrageous sum, and then not even understanding what the results of that campaign may be.
Instead, understand what are the most important statistics in business, such as:
- Where your new clients or customers come from — that’s where to invest your time and energy.
- Your gross income and your expenses — kept as individual statistics, so that you can see when changes occur.
- Numbers related to your actual products — statistics must correspond to an actual thing or product to be useful.
When you analyze marketing decisions against statistics, you can see where changes have occurred as a result of your initiatives. That way, even if a service costs a little more, if the ROI is there, you know it is worth it.
Keep Sight of the Big Picture
Marketing changes are not always overnight, and cutting back can cost you business. So, utilize all of these factors and decide where to reduce scale–getting out of the red and into the black.