The Expert Podcast

So why does advertising have to be so hard? Why is marketing probably the pain point of your company? You spend hours and thousands of dollars pursuing advertising and marketing, and what's the difference between the two? How does it relate to sales? Well, if you're a company, the lifeblood of your business is revenue. Revenue comes from customer orders, transactions, or sales. And in order to get that, you have to have customers coming in your door, on your website, or calling you on the phone. In order to do that, you need marketing or advertising. Advertising is one part of marketing. Marketing is an overall strategy of getting customers to come to you, raising awareness of your business, and getting customers to order your product or service.

Why is it so hard? Well, it's hard because you have to be where the customer is that wants to buy from you. You don't know where those customers are before they come to buy from you. Sure, if you're in a certain industry, you may know where there are certain demographics of people that are likely to buy from you. Maybe if you're a B2B, you know where the types of businesses are that buy from you. Maybe you sell stuff to attorneys, and you know that there's an attorney trade association meeting or conference, and that's where there will be some attorneys. But you don't know which ones need to buy from you right now.

That's why Google ads is one of the ways that a lot of people advertise. People are searching for a certain product or service, and so you think, "Well, if you pay for Google ads, you show up on the search, and you get business," which is kind of true. But there's a downside to that. I'm sure you have spent thousands of dollars on Google ads, and you're not sure if it was worth spending. You may have had additional sales, but did those additional sales add up to be enough revenue to pay for the Google ads? Not just the sales, but the net profit. For example, if you spend $1,000 on Google ads and you sell $11,000 worth of product, you might think it was worth it, but it's actually not because when you sell $1,000 worth of a product or service, you don't keep the whole thousand. You have payroll, cost of sale, maybe fulfillment cost, so you have a net profit in your business of maybe 20 or 30%.

You might say, "Well, some of those costs stay the same even if I sell more." That's true in the short run, but in the long run, if you consistently sell more, you probably have to add more employees, bigger facilities, more costs of other things like phone expenses, electric expenses. Either way, you can't count all the revenue for sales. We like to look at a five to seven times return on advertising to see if it's worthwhile because not every type of advertising is going to work. Some is speculative, and if you don't get a 7x or maybe even an 8x return, it's not going to be able to offset the ones that don't work.

So how do you make sure you do that? Well, it's tough because not every advertising method is going to be known for the results until you do it, so you have to do some testing. The best way to do it is to have advertising that doesn't cost a lot to begin with, that way your ROI burden is not that high. Do things internally like content marketing—we've talked about that before. Do things that maybe can be part of your daily workflow or things that are cheap. You'd be surprised how cheap some things are in terms of the cost of the potential advertising for more ideas on different types of advertising that could be done cheaply but have a wide reach. You can check out our website, Tech Motor. Content marketing is a big one. Even in this day and age, Direct Mail is a big one. You may not think that Direct Mail like postcards or letters is a thing, but think about how much you spend to reach one person on Google. You might spend 80-90 cents or a dollar to reach one person, and in that moment they click on your site, and you're done. If you send them a postcard with your description, it might cost you 50-60 cents, and that's a durable piece of marketing. Durable advertisement—it sits there on their desk, maybe circulated more than one person sees it in a company or in a household. Right? So there are advantages to that if you have a targeted list.

The other big factor in advertising or marketing is analysis. When you do something, you have to see how it worked, why it worked, and what products did it sell. You can't just set it and forget it. Even with Google ads, you have to make sure you're constantly reviewing your keywords, reviewing your ad wording to make sure that the landscape hasn't changed and left you in the cold.

The big takeaway is don't give up on marketing or advertising. You have to do it to do business development and grow your company. But it is going to be a struggle unless you have a dedicated strategy and process to always be doing something. You'll get frustrated and give up, and your business will stagnate and maybe even decline. Don't overlook visibility in terms of outdoor visibility. A sign, a billboard, is something that's always there. Be open-minded to offline sources. If you're only doing online, online's getting crowded, social media is getting crowded. How many ads do you see every day? Some of the less traditional offline methods may actually have more blue ocean around it, where there's not 50 million ads you're competing with. You may be the only one if you're doing other non-traditional methods.

Feel free to contact us if you need a consultation or to discuss marketing and advertising in more detail.