Why would a CPA have opinions about marketing and entrepreneurs? Because the grass is sometimes greener on the other side of the fence. During times when I’ve been busy crunching numbers, I’ve been fascinated by the marketing activities of the companies with which I’ve been associated. While I do enjoy the so-called left brain (quantitative, logical, analytical) aspects of the accounting profession, the so-called right brain characteristics of the marketing function (creativity, imagination, ingenuity) have much allure and great appeal.
Another reason comes from the fact that, for practically my entire career, I’ve been involved with small businesses and entrepreneurial startups. As such, I have had a virtual front row seat to observe how entrepreneurs make their marketing decisions (and the consequences of those decisions). Although it might not normally make sense to take marketing advice from a CPA, my observations and insights might prove useful.
Most of the marketing mistakes made by startups stem from the fact that they are strapped for cash; therefore, entrepreneurs bring marketing functions completely in-house, and assign the marketing tasks and decisions to people who have other responsibilities. It is very common for owners for small businesses reserve the marketing decisions for themselves, even though they have all the other responsibilities of running a business on their plate already.
Foregoing the services of marketing professionals is not, in and of itself, a mistake. For startups it’s a fact of life that survival means running lean. Running lean means making due with the resources and talent you’ve got. However, if you’re going to pass up the services of any professional, don’t disrespect the knowledge, talent, and skills you’ll be doing without. I cringe whenever I hear someone say, “How hard can it be?” If you’re not going to pay for some very important services, it’s going to be extremely important for you to get up to speed on the things you’ll be doing yourself. Through research and self-education you should be able to avoid some very common mistakes and figure out some of the things a professional would advise you to do.
Failure to have a formal integrated marketing plan
Those who are not familiar with marketing as a profession or a field of academic study may think of marketing as being nothing more than advertising and public relations. The American Marketing Association defines marketing as, “…the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” Given this definition we can easily conclude that a business’s marketing function(s) will affect — and be affected by — virtually every other functional area of the business. If you’ve ever had a marketing class in school, you’ll probably remember learning about the 4 P’s of marketing (or the marketing mix): product (or service), price, promotion, and place (or distribution). When contemplating these elements, it becomes apparent that marketing intertwines with everything from operations, to finance, to logistics, to the very mission statement of the organization.
Entrepreneurs who think of marketing as being primarily a series of advertising decisions (and who treat it as a stand-alone responsibility they can take care of on the side) resemble contestants standing in one of those wind machine cash booths on a game show or at a carnival. Even though they’re encompassed by numerous possibilities swirling about them, they usually end up grasping at whatever is in easy reach and their marketing decisions end up being dictated by chance encounters instead of well thought out strategies.
Having a marketing focus inappropriate for the size of the business
For the purpose of this article, let’s assume that most marketing activities fall into one of two categories: 1) brand development, or 2) customer acquisition. The appropriateness of focusing on one of these categories over the other depends a lot on the size and maturity of the company in question.
When you think of the companies who are superstars in the area of brand development (e.g., Coca-Cola, Nike, Verizon) you notice that they tend to be enterprises that are seeking significant market share in huge markets. It makes sense that they would get substantial return on investment from any activities that keep their brands fresh in the minds of potential consumers.
Startups on the other hand tend to be microscopic enterprises struggling to capture a sliver of a niche (or geographically limited) market. Yet many of these startups pursue marketing activities intended to create and develop a brand more than acquiring specific customers. When Mercedes Benz spends millions to sponsor an international sporting event, the chances of them making a positive impression on vast numbers of potential customers are virtually assured. However, when Jimbo’s New Sales Force Automation Software sponsors a float in the local high school homecoming parade, the chances of making impressions on potential customers are very slim.
Things like designing logos, getting embroidered polo shirts, and having automobiles wrapped in flashy advertising probably do more to make an entrepreneur feel proud about his or her business than they do to close sales. Startups should devote all the resources they can to customer acquisition and keep brand development to a bare minimum.
Pursuing the interesting at the expense of the effective
Let’s face it. A big reason why entrepreneurs often fail to pursue customer acquisition activities is because they’re simply not that fun. Prospecting, cold-calling, networking, setting up sales meetings, making presentations; these activities can be mind-numbingly tedious, monotonous, and boring. Additionally, many entrepreneurs feel ill at ease in front of potential customers. Nothing creates anxiety like putting yourself out in front of people who can reject you on a whim.
It’s human nature to keep one’s self busy with interesting activities and justify one’s avoidance of drudgery; using the excuse of limited time. A successful entrepreneur must take an unprejudiced look at all demands on his or her time and give dreary (yet necessary) marketing activities the priority they deserve. It’s all about getting and keeping the vision.
If entrepreneurs can have the discipline, dedication, and self-awareness to:
- get up to speed on trends and developments in the marketing profession,
- have a well thought out, integrated, formal marketing plan,
- focus on customer acquisition more than brand development, and
- dedicate resources to necessary, yet unpleasant activities;
they will do much to ensure the survival, health, and long-term success of their enterprise.
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