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Knowing When to Let Go

December 1, 2009

As year end is rapidly approaching, those of us in the marketing biz are heavily ensconced in planning our budgets and strategies for the coming year. Since a good many businesses were turned upside down in the past year as a result of one of the most unusual (ahem!) economic climates in several decades, many business owners and marketing managers are eyeing each venue with extra scrutiny.

Should we continue with this advertising vehicle next year even though the return was dismal?

We’ve been advertising here for years, but the traffic fell off the deep end this year. Do we continue out of loyalty, hoping things will recover? Or do we cut our losses?

These are but a couple of the quandaries business owners and marketing managers grapple with as they try to determine the best course of action for the coming year. How do you know if your decision to stay or go with a specific marketing strategy or advertising venue is the right one? Here are a few criteria to help you decide what’s best for your business:

  1. What was your ROI (return on investment) for the past year? If you spent gobs of money in hopes of raking in lots of new customers spending beaucoup de bucks, how did you do? Break even? 3.2:1? Or did you spend tons of money with little or no results? If the numbers don’t add up it’s a clear sign this venue isn’t producing. Cut your losses.
  2. What do you do if this venue used to be a gold mine of new customers? Here’s what’s happened in the last 24 months to help explain the change in results: The fish moved to a different pond. You are fishing in an empty pond. This is not unlike barking up the wrong tree. How long will you stay? Markets change. This last year they all changed a lot, including where your customers are. Customer loyalty went out the window. Now you must find new loyal customers. Stop fishing in the same pond. It’s empty.
  3. What about brand awareness? Shouldn’t that be worth something? Yes. It should. In a normal economy. Building and maintaining brand awareness is very important to your overall marketing strategy and success. But again, say you’re considering staying with the same venues (that aren’t producing very well) under the pretext that you’re doing it to save face with your existing clients who see the ads and to “build awareness” with potential clients. First, your existing clients already have brand awareness. And you likely already have many other venues to reach them. You’ve already captured their contact information through email and snail mail channels, so you don’t actually need to reach them just so they “see” you out there. Second, you’re not building any brand awareness with potential clients because this venue didn’t produce well enough the past year to make enough customers. It didn’t work.
  4. Have you hit rock bottom with this venue? The bottom line is that it’s very hard to let go of what’s familiar and comfortable – even when it’s not going well. It’s a bit like a divorce. No one wants to go through that pain even when you know in the back of your head it’s the right thing to do. Perhaps you know the advertiser or rep particularly well on a personal level. Perhaps you know this company is hurting financially too. You don’t want to be the bad guy. But if you stay, is it the equivalent of flushing your money down the toilet? Maybe… How do you feel about that?
  5. If the alternative to staying with a non-producing advertising venue is going with another one (The Great Unknown); and you don’t know if it will be successful or not, what do you do? This is tough because you’re wondering if the grass will be greener with another venue or will it be just as brown as with the current one? I recommend trying the new venue. Why? Because the fact is you already know that the current venue doesn’t work. You have concrete information it doesn’t work anymore. You can cross it off the list. That means you’ve only got one way to go: up. And it’s got to be under new circumstances with a new venue. It may not be great, but it’s got to be better than the old guy.

Remember, everything has changed in the last year. Are you going to change with it or be left behind? Your customers have already changed. The fish are now in a different pond (unless you can prove through a successful ROI that they’re still in your pond). Start fishing where the fish are. You stand a much better chance of catching one – even with a plain hook – than fishing with a well-baited hook in an empty pond.

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