Sadly, many business owners don’t understand the importance of marketing. Because of this, they fail to plan for rough spots in the business cycle, such as off seasons, economic downturns, and other events. As the cliche goes, “failing to plan is planning to fail.” Every firm should have a marketing plan of some sort, and it should be in writing. Practitioners that don’t “do” marketing will invariably fail.
One of the things that I think most people in the marketing world take for granted is that everybody understands the fundamental role of marketing in business. Through my daily interactions with other practitioners over the past several years, however, I have been amazed at the relative lack of understanding about the importance of marketing. More often than not, marketing is a back seat, tertiary thought that comes after their service offerings and daily operations, if it’s even that high of a priority.
One of the phrases that my friend James Orr has coined in the real estate investing realm is that “everything starts with motivated sellers.” Without motivated sellers, there are no properties to buy, rentals to put tenants in, fixer uppers to flip, or deals to wholesale. This is such an important aspect of real estate investing that it’s almost a mantra for the way that James and scores of other successful real estate investors run their businesses. The key to getting in touch with motivated sellers happens to be marketing.
I guess that a good place to start in this discussion is to define what marketing is. Google define tells us that marketing is “the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to satisfy customers.” Marketing really does consist of more than what most people think it does. Marketing is more than just the activities that drive sales. Rather, marketing encompasses all the activities that seek to identify what consumers want and how to promote and deliver those goods and services.
Before you ever even make the decision to offer a particular service, you should first spend the time to determine if there’s even a market for that service offering. If there is a demand, you then need to figure out how to get that offering to the consumers that want it, how to tell consumers that it’s available, and how to price it such that there is money left over for a profit. This is all part of the marketing process, and really should occur before the service itself is even produced.
In more common usage of the term, “marketing” is often seen as only the promotional aspect of a service that is already available. This part of marketing consists of making the consumer aware of what you’re offering, and convincing them to buy it. There is a tendency in corporate environments to separate the marketing and sales functions into disparate departments, which is often a mistake. The purpose of the promotional element of marketing is to drive sales, and therefore the two functions are intricately connected. A good example of the disconnect between these two departments is when companies that sell capital equipment have vastly more people in their marketing departments than they do in their field sales force. Another example is when marketing and product development folks ignore the input from the field sales personnel. This input is often derived from actual customer contact, which most employees of large organizations don’t experience.
This is one of the key benefits of being a small and “nimble” tax practice. You can rapidly develop, price, and market new service ideas or new niche markets, obtain direct and nearly immediate feedback from prospects and clients, and rapidly fix things as you go. The smaller the firm, the faster to market you can actually be with improvements. Success loves speed.
The prime purpose of one of my blogs in particular is to test taxpayer representation marketing promotions using a vast array of messages, media, and markets, which are often referred to as the three M’s of marketing. Before we conduct a test, we first do some background research to determine if there is even a market for what we’re considering selling, and we analyze whether or not we can at least break even on the marketing test using certain realistic assumptions about sales ratios. Pricing strategy is also something we discuss a lot before launching a new test. The actual development of sales copy, writing and placing ads, setting up measurement systems, etc., comes later in the process. Making sales and tracking metrics, then tweaking the marketing, comes next.
In conclusion, without marketing there are no sales. And without sales, there is no revenue. And without revenue, any business will quickly succumb to the statistics that show that nearly 2/3 of all businesses fail within their first 4 years.