There are a number of vital components to any business. You need great people – which is a result of a solid HR process, you need great leadership, a solid vision, and a great product or service. But I believe that perhaps the most important component is the marketing.
A business can have an excellent product but without the communication to connect that product to someone who wants or needs it the business will never be successful. For that reason I believe every entrepreneur needs to have first hand experience and an understanding of how the marketing and advertising works in their business. Marketing is what brings money into the business to pay the bills and salaries.
There are a lot of specialized skills and unique experiences necessary to be good at marketing. However, once you become an expert at marketing you’ll never look back. There are two distinct approaches to marketing:
Unless your company has limitless money to spend on advertising as is the case with companies like Coke, Apple, or Budweiser then Direct response advertising is really the only thing you should concern yourself on.
Direct-response is a measured, scientific approach to advertising where you have the ability to tell if an advertising campaign works. You can test variations of the message, over different media, at different times of the year and see the effects of those changes. It becomes easy to know if money spent on advertising results in sales and profit.
For this reason many advertising platforms would actually prefer you didn’t use direct response marketing.
In Yahoos hey day they made a boat load of money from banner ads. They would fly some sales guy to New York to meet with some of the biggest advertising firms and tell them how much more eyeballs would see their ad on yahoo.com compared to a billboard sign on the highway. They would sell millions of dollars in ad spaces to big companies with deep pockets to run branding campaigns. And because it wasn’t easy to measure the impact of those ads in terms of new sales Yahoo could continue to suck money out of them. Yahoo didn’t want the advertisers to be able to figure out that the value of those eyeballs was much less that what the companies were paying for. This eventually led to a small collapse in the online advertising space as many companies eventually figured out that they were not getting results.
The Yellow Pages have been having a similar problem. For anyone who has ever tried to place a direct-response type ad in the yellow pages can tell you, they try very hard to convince you that it’s not a good idea. There’s a good reason for that. If advertisers could measure the performance of a yellow pages ad then they would probably find out that they’re overspending on it and cancel.
There is a quote from Galileo, who said ‘Count what is countable, measure what is measurable. What is not measurable, make measurable‘. I believe that all aspects of business success revolve around measuring and counting the impact of what you do – including marketing.
I have personally read countless marketing books. They are often the most insightful and inspiring books I read. Here’s a short reading list of my favorites which I think ALL entrepreneurs NEED to read:
- Tested Advertising Methods – This is probably the penultimate book by John Caples which is referenced by nearly every marketer. It will convince you of the importance of the testing of advertising methods and is a great place to start.
- My Life in Advertising and Scientific Advertising – This is another classic book by Claude Hopkins which belongs on the shelf of every marketing professional, entrepreneur or CEO.
- Influence: The Psychology of Persuasion – This is the seminal book about the psychological triggers that make people want to buy. There are seven and each will make a dramatic impact on the effectiveness of your marketing.
The importance of marketing to the success of your business cannot be understated. It will mean the difference between your product or service making money or failing miserably. Selling everything from iPhone games to houses benefit from good marketing. Give yourself a great head start by picking up the three books I mentioned above and continue to be a student of marketing throughout your business career.