Marketing for small businesses has become an expensive proposition in terms of both money and time. In the good ‘ole days, marketing was as simple as putting a display ad in the Yellow Pages and waiting for the phone to ring. With the advent of the Internet, small business marketing it is a completely different game.
Even a minimal Internet marketing effort involves a website with numerous associated expenses. A business might pay multiple vendors to manage a range of tasks including search engine optimization, content writing, posting to a blog and social media sites, or managing pay-per-click and email campaigns. Referral partners might also require payment. And a phone answering service could be retained to ensure inbound calls are qualified for sales.
That’s a lot of work and a lot of dollars that can easily go to waste without verifying those efforts actually target prospects that fit a business’s ideal customers? For example:
• Where does the business actually have capacity?
• How will targeting the right prospects impact cash flow?
• How will the work that a business sells affect its margins?
A business is rarely static. It may be growing or shrinking, or flush with cash or cash strapped. You may have lots of capacity in one area but none in another. Some types of work may bring in quick cash, but others may have slow payment cycles or require capital investments and financing.
The financial and operational situation at any given time MUST be part of sales and marketing planning. Marketing choices that kill profits or strain cash flows while increasing the wrong kinds of sales can bury a business. I have seen companies sell themselves into bankruptcy because they mistakenly believed that any new business is good business.
Lots of articles speak to the importance of getting sales and marketing to work more closely together. I have even seen features about getting sales and operations to better coordinate their efforts. I rarely encounter a lot of emphasis on including financial people in discussions about where to target marketing. At the end of the day, business success is measured by profits, not sales.
What kinds of business analysis could you do determine the types of sales that could yield the best margins and the best cash flow?
This blog was written by Laurie Leonard, the President of SUITE 1000, a U.S. based national telephone answering service, inbound call center and outsourced call center service. Her company has specialized in handling legal intake, sales leads, email lead response, appointment scheduling, customer service and help desk calls for over 20 years.