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Article:
The Top Seven Marketing Mistakes by: Ted Nicholas In my view, nearly all government statistics about reasons for business failures are nonsense. Undercapitalization, inexperience, or poor management are usually blamed for all business disasters. Of course, there can be one or several more causes that result in a business going 'belly up.' However, from what I've seen, marketing mistakes are by far the primary reason businesses do not survive. This includes companies which consider themselves direct marketers as well as those who do not. Here are the seven most common marketing mistakes: 1. Management treats marketing as a business expense or simply a department rather than a necessary business investment. Solution: Marketing should be treated as the driving force of any company. It is the only function that brings in cash. The other major functions in a company are necessary. But they all spend cash. This includes the primary business departments of finance, production and research. To market any product or service successfully, the company must do two things: A. Provide marketing with sufficient resources B. Put marketing at the heart of its business strategy The whole company should be focused on the needs and wants of customers and be prepared to satisfy their demands. Marketing must be part of the philosophy of all entrepreneurs and managers. 2. Management does not know specifically what it costs to recruit a new customer. Plus, there are no accurate statistics on the average customer lifetime value. Without this knowledge, it is impossible to make sound decisions. You cannot determine how much to invest in marketing. If you spend more to gain a customer than their lifetime value, ultimately you will go broke. In the absence of this information, many businesses can and often do fail. To make matters worse, few of the casualties understand why they failed. Solution: Before you invest large sums on marketing, determine the average lifetime value of a customer. An excellent book that I highly recommend on this topic is The Loyalty Factor by Frederick Reicheld. 3. Management makes no attempt to build a customer database. This is especially so with most retailers, restauranteurs and department store owners. However, I've seen this in many other businesses. Solution: A company's database of customers is potentially its biggest asset. It's much more valuable than equipment, inventory, etc. This is not only true of companies that utilize mail order or Internet marketing. Every single company that wants to survive and prosper needs to build a database. 4. The company does not communicate often enough with its customers. The result is lower sales and profits than are otherwise possible. Solution: Contact your customers a minimum of once a month. When I started my first business at age '21
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