How to Avoid Marketing Yourself into Debt
Marketing your business the right way while staying in your budget can be challenging. With so many channels and platforms available, it can be very easy to overspend or concentrate on the wrong medium. Marketing mistakes could cost you sales and leave you with more debt rather than profit. Following these simple steps will help ensure your marketing spending doesn’t end up costing you more than you make from it.
Marketing is an essential part of any business, helping you reach a new audience, generate more sales, and stay in touch with your existing customers. It isn't something that can just be done as an afterthought; there's a whole sector solely dealing with multiple companies' marketing needs. The process requires a lot of planning and research to deliver results that will benefit your customers and your business. Getting your marketing wrong means your company could lose money and get into debt — the exact opposite of what you're setting out to do.
There are steps you can take to ensure your marketing efforts don't end up costing more than they earn.
Make sure your product is ready before marketing
Before you even start marketing, you should make sure the product is ready for the world. While there's nothing wrong with coming up with marketing ideas before the final product is ready to go, you should ensure the marketing reflects the latest version.
Trying to market a product before it's ready is like trying to sell a fruit that's not ripe yet. You could easily spend a lot to promote something in all areas, to the point everyone is sick of it. However, if what's in the box either doesn't serve a customer's needs or isn't ready for release, you'll struggle to sell it. Spending a lot promoting an unrefined product is an easy way to blow your marketing budget and leave a hole in your company's finances.
Necessary tools only
The market is flooded with tools for everything from social media scheduling to video editing. Deciding which of these will be useful for your business and which would just take up hard drive space can be difficult for the uninitiated. Never buy software for the sake of it. Before you call the IT department to insist on the latest app from the biggest tech companies, consider what you'd be using this tool for and whether you can achieve the same results with what you already own. Downloading tools just for the sake of it is a waste of storage, and if they have a premium price, a waste of money.
Spend proportionately
You might want your brand everywhere, but getting into every newspaper, onto every website and every TV channel is expensive. Before committing to a six-figure marketing budget, you should ensure what you're planning to spend is proportionate to what's coming in. Apart from in exceptional circumstances, or if you really know what you're doing, spending more than half your income on marketing is unlikely to be sustainable.
You should also ensure you budget for each type of advertisement, so your funds aren't disproportionately allocated. It'd be very easy to designate the bulk of your marketing money to advertise on TV or printed leaflets, but if you don't leave any for online marketing, it could end up being more expensive than you planned.
Prioritise your most successful channels
There's nothing wrong with experimenting in different types of marketing. If you've stuck to local directories and want to try advertising on TV, you could potentially reach a new audience and reap the rewards. Once you've tried several marketing methods, you should have some data which you can analyse to see how successful each approach has been, and whether it has generated any sales. Use this data to decide which methods are worth pursuing in the future, and to see which were less successful.
Without doing this, you could find yourself spending money unnecessarily for fewer customers, and your marketing budget drying up faster.
Don’t automatically stop if you get into debt
If the worst happens, and your company finds itself laboured with severe debt or is even insolvent, you might be tempted to stop all marketing activities, and sort the situation out before trying to get things going again.
If you're undergoing a debt recovery procedure like a Company Voluntary Arrangement (CVA), where trading is likely to continue without hindrance to your customers, you should maintain the status-quo if possible: Keep posting to social media and keep your advertisements in the local press if you can still afford them. If it won't affect your customers, there's no reason to worry them.
If you're undergoing a procedure that will likely impact trading, you may want to let customers and suppliers know via your social media accounts or newsletter. The danger with this is customers may assume you're going under. Check with your licensed insolvency practitioner before doing anything like this, as your case will be unique to your company.
Summary
Marketing can be a complicated process that the uninitiated can find daunting, and mistakes can be costly. Before you start marketing, make sure your product is ready, and spend sensibly. Concentrate on your successful marketing channels, experiment sparely and use your findings to plan a way forward and decide what to spend on in the future. When it comes to tools, only buy what you need to avoid wasting your budget. Finally, if the worst happens and you find yourself in debt, consult a licensed insolvency practitioner about what to do with your marketing while you try to recover.