You've probably heard the expression "penny wise, pound foolish."
The idiom captures when someone is overly concerned with saving small amounts of money but overlooks or neglects larger, more significant expenses.
And it's never been more applicable to marketing.
"Our sales are down... we need to cut our marketing spend to preserve our profits!"
Penny wise, pound foolish... because marketing done well leads to incremental sales.
So unless you're certain you're not doing your marketing well, reducing your spending today is likely to result in further sales losses tomorrow, kicking off a vicious downward cycle from which many businesses never fully recover.
That's not an opinion, it's a fact: research from BCG found companies that cut brand spending in a downturn lost 0.8 percentage points of market share relative to those that boosted brand spending... and regaining that lost market share would require a future investment of $1.85 for every $1 saved in brand spending.
Penny wise, pound foolish.
"We don't have money for research... let's just go with our gut."
Research done well can give companies the insight needed to make better decisions.
What customers should we try to reach? How much do we need to spend to get them to buy? What marketing efforts are likely to be most effective? All of these questions and more can be answered with research.
Sure, you can save your research dollars and "test and learn" your way to the same answers. And sometimes, that's effective. But if saving $50,000 on research ultimately costs you $100,000 (plus a lot of time and effort) on failed experiments to get you to the same results?
Penny wise, pound foolish.
"This consultant has a great track record solving tough problems just like the one we have.... but he's also really expensive. Let's go with a less experienced, less costly alternative."
Consultants are often given a bad reputation; sometimes, when they try to provide solutions before they thoroughly understand the situation or don't back up their opinions with facts, that reputation may be justified.
But experienced consultants can be worth their weight in gold.
They've seen (and likely, made) their share of big mistakes, so hiring them to advise you on similar situations to those they've addressed can prevent you from making those same mistakes and ultimately save you a lot of wasted time, effort, and money.
Yet, if you only look at the cost of consultants without considering the costs of any avoidable mistakes those consultants could prevent?
Penny wise, pound foolish.
Marketing dollars, like all significant business investments, should be carefully considered.
But marketing done well is money well spent.
And reducing your marketing spend in the short term when it will negatively impact your business in the long run is the epitome of "penny wise, pound foolish."
Don't be foolish.
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