Advertising – not the be-all and end-all

I read a blog post recently about a consultant who was trying to develop his business and wanted to advertise. This person immediately began an analysis of potential costs and returns for each advertising medium, as well as some brief analysis of who their customer might be and how best to reach them.

What he hadn’t considered at all was that advertising might not be the best way for him to grow revenue.

Businesses sometimes see advertising (often mass market advertising) as being the goal of a cash rich business – have the cash, spend it on advertising and watch the business roll in. Instead it can prove a costly mistake, either as an overall strategy or in implementation.

I worked with a client who was thinking along the same lines – this business needed to grow revenue and wanted me to advise them on how best to advertise.

First a little on the company background: the business owner/managers were two ‘techies’ who had set up an online retail business. Their expertise was technical, and certainly not consumer or retail.

I immediately called ‘Whoa there’. Mass market advertising is not always the right way to go – in fact it could bring huge problems like an inability to meet demand due to stock or resource issues, leading to poor customer service and brand damage, to name but a few.

My client was in a similar boat: our research showed that mass marketing just wouldn’t work for their business: instead they needed to build their brand and market to their specific segments, thereby growing the business organically.

A key option which I explored with them was to diversify a little: we recommended that they use their technical expertise to ‘white label’ their offering to other players in the market. Our research showed that other players were struggling to move to online retailing. These companies had the retail experience but not the technical expertise (which my client had in spades).

This strategy proved a successful one: now the client is working on technical projects they are good at, enjoy, and are growing their expertise. A little targeted advertising and brand development kept their core business in growth mode too, albeit slower than they had originally envisaged.