I opened the mail today and out fell our annual invoice to renew our marketing sponsorship deal at The Nottinghamshire Golf and Country Club and the debate began as to whether we should renew or preserve cash in the bank ‘just in case’ we need money later down the line to survive to COVID-19.
Our past renewal decisions have been easier because we have accurate financial information that outline our cashflow position and revenue forecasts. Consequently we’ve made the decision based simply on an evaluation of the return on investment this sponsorship has delivered and its potential to fulfil our future new business objectives.
Commercially, in the past the deal has paid for itself many times over in terms of work won, referrals, and other related benefits such as opportunities to network with other sponsors.
However, as you can imagine, in 2020 we’ve found the decision has been a little bit more difficult because we are in uncertain times and no-one has a crystal ball to understand whether the consequences of COVID-19 will lead to a U, L or V shaped recession/recovery.
The number one question we asked is whether we might need the cash to survive? After all, a sponsorship board won’t be any good to us if we’re not trading right?
But how do you balance this against the need to continually invest in marketing to promote our business to survive?
Other moral orientated questions also arose related to goodwill and whether we had a duty of care to also help the golf club, which, after all is a trusted business partner that has literally had to close it doors to revenue. Particularly when we ourselves have been shown such fantastic support by our own clients?
And so we went right back to basics with our marketing planning to review and assess if this promotional tactic still met our objectives, and if so, could we justify this investment at such an uncertain period.
We have already shared our advice on how to adjust your marketing plan to react COVID-19 but I was taken right back to university where I first learned the principles of the marketing planning process and also the chapter I wrote for a book called “Business Grow-How” – the stepping stones for successful growth which was published when I worked for the accountancy firm BDO Stoy Hayward.
Although the book is twenty years old, the DIAMOND model and the advice provided is still very relevant, particularly for businesses who may now be going back to basics like us and re-evaluating where they are now and where they want to be in the future?
Now, I can hear you saying, all this is very good waffle, but what about the original question? How to make the best marketing decisions?
As you can see from my example, we have all the financial information we need to make an informed decision. If we take control of the destiny of our business and continue to promote ourselves we can market ourselves out of this phase of our business journey (after all Simple Marketing Consultancy was established in the 2010 recession!) But did you notice the emotion that has crept in?
The best marketing decisions are based on where you are now and where you want to be, your position on DIAMOND model and a thorough understanding of your target market, their problems and a clear proposition for how you can resolve them. The market segmentation rules are also very much applicable e.g. is the market big enough to be sustainable and can it be communicated with in a cost effective manner?
If you are certain a marketing tactic will get a yes to these questions, the chances are it’s a good investment.
- Is it focused on your target market?
- Will it deliver the sales leads you forecast to meet your objectives and deliver ROI?
- Is it the most cost effective route to the target market?
If you are wondering did we invest?
Yes we did, because all the evidence was there to prove that those who have an effective marketing strategy and implement a co-ordinated programme of supporting promotional tactics that will achieve these objectives will not only survive a recession, they often do better than those who retracted marketing activity.
If you need advice or hands on support to promote your business during these challenging times please get in touch.