May 07 Advertising and the health of the business
For my personal health care, I have an annual checkup, biannual dental exam and annual eye exam. I trust these professionals to explain the results of the tests they perform. Sometimes adjustments in my routine are necessary. Some adjustments are easier than others. For example, it is easier for me to lose weight than it is for me to grow taller so that the ratio between my weight and height are within a normal range.
For my company health, I have professionals I trust with whom I discuss the finances of the company or industry trends. Being part of the Agency Management Institute has been a great resource for me in keeping in touch with the pulse of my industry.
When an industry is feeling poorly, businesses within the industry have to take stock of what they have to guard themselves against the “illness” that is slowing their businesses. Marketing tends to be at the forefront of the cuts that companies make.
“Marketing” is a broad term. It has subdivisions of product, price, place and promotion. While companies keep close watch of their costs to create or to serve, the price they charge their customers and where the product or service goes, one of the first cuts tends to be advertising and public relations.
The promotion arm of marketing includes advertising, public relations and the sales force. Advertising and public relations makes the job of the salesperson easier because they are sales tools. Sometimes they can speak to the customer before the salesperson can. A customer who is educated in the product or service makes a better prospect. Sometimes there are fewer questions, or the questions are more direct to the product or service so that the salesperson can differentiate from the competition. Therefore, advertising and public relations save the salesperson time. The more sales that can be made is better for the salesperson and it is better for the company.
Advertising used in lean times can help a company gain market share, meaning they get a larger percentage of the overall business in their category. So when the lean times start to get healthy again, the business grows with it. It is an investment, not much different than buying a stock at a low price to watch the value increase as the market increases.
Businesses that do not advertise in good times run the risk of not growing. “We’ve got all the business we can handle.” This could mean that the business is underdeveloped. Perhaps that business should re-evaluate its position in the market and how it can expand.
Business decisions are difficult. It is easy to cut advertising because it doesn’t seem to have an adverse effect on people. It seems to be easier to control. But, advertising is like the wave in an ocean. It takes a while for the swell to build. Once it starts moving, it gains momentum. And, even when the advertising stops, it still takes a while for the wave to subside. Momentum does not stop easily.
It’s worth a discussion with a marketing professional to check the heartbeat of a business from that perspective.
Originally published in the May, 2016 issue of the Northeast Mississippi Business Journal in the Northeast Mississippi Daily Journal.