At Credo, we have helped over 6,500+ businesses, and spoken with many more, over the last few years to get them introduced to qualified digital agencies and then help them make the right decision about who to hire.
Along the way, we’ve discussed with them their approach to investing in a new channel or getting a marketing program started.
When I ask about budget, the usual response I get is something along the lines of “Well it depends on what I will get.” When I then outline the project (because that is the purpose of our discovery calls at Credo), I then normally get something like this:
Well, we’d like to start low and then of course once we see ROI the sky is the limit!
I get it, I do. No one wants to waste money and no one wants to spend more than they have to.
But here is the problem with this mindset especially when it comes to marketing.
If you of the “start low and then scale up if it works” mindset, you are likely doing three things (which you may not realize):
- You are elongating the process and time required to learn if the channel will be positive for you;
- You have likely not done the research to know what result will determine “positive ROI” nor do you have the tracking in place to determine if it’s worth continuing to invest in;
- You do not know where it sits in the funnel or how to measure if it is effective.
Remember, I have seen a lot of businesses with this mindset! It is super common, so don’t feel bad if this is you!
I do believe that there is a better way to approach a marketing project if you don’t have a large budget, and that’s what I want to point the way towards.
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Educate yourself as much as you can
If you’re skeptical about marketing, you will naturally be skeptical hiring any company or employee in a marketing role because you do not think it will be effective and that your spend will be wasted.
If this is the case then before you set out to hire you should educate yourself about the questions to ask consultants, determine the metrics against which you will judge success, have tracking in place so that you can accurately measure, and have an idea of which activities a marketing company may recommend that you do to see results.
You should also understand how quickly you want/need to see results, because this helps determine which channels you should invest in.
For example if you need to see measurable results in your business within the next quarter, you should not invest in SEO services such as content creation and link building. SEO takes longer to see results than this timeline, and if you try to squeeze it into the timeline then you will inevitably become frustrated, likely not see the direct results yet, and will move on saying “Oh we tried SEO and it didn’t work.” I have seen this too many times to count and recommend that you not put yourself in this position. Instead, invest in paid traffic (Google Ads, Facebook Ads).
Speak with experts
If you’re not a marketing expert, or not an expert in the channel that you are thinking about investing budget into, you should spend some time with an expert in that channel to learn more about what to expect and what you should look for in a firm, if that is the direction that you choose to go.
There are many experts out there who are glad to share their wisdom with you, and there are even platforms like Clarity.fm where you can pay for their time. For example you can find SEO, Google Analytics, and Online Advertising experts on Clarity for hire by the minute. My own profile is here.
At Credo we also offer paid marketing strategy consultations to help you figure out where you should invest your marketing dollars and to help you prepare for the process ahead of time.
Start with a strategy
The most common reasons I see a company want to “start small and scale up when an ROI is seen” are:
- You are not convinced it will work or that it is the right thing to invest in;
- You legitimately do not have the revenue to spend more until you see a return from that channel.
We’ll talk about how to get around the second one below, but first let’s talk about when you’re not convinced that the channel is the right thing for you to invest in.
I have recently spoken with quite a few companies who have been investing in various marketing channels like SEO, PPC, content, and display but don’t feel like they have a good understanding of their holistic marketing strategy, what is/isn’t working, and what they can change to see better results.
Because of this, I usually recommend that a business with a lower spend available start by paying an expert to help them analyze their current campaigns, determine their competitive landscape and what their competitors are doing for marketing (and thus where opportunities exist to exploit), and then decide how to get it done.
You want to approach any investment like marketing, which can be sizeable, with a “ready, aim, fire” mentality instead of “ready, fire, aim” which is what we see all too often.
Save up to invest more upfront
If you’re in the second camp mentioned above that you legitimately only can spend a smaller amount upfront, then there is a way to get around that limitation to learn as quickly as you can if something will be profitable.
Save before spending.
Too many people go through life spending first and then trying to figure it out. When I talk with some friends, they always say “Oh I can’t afford that (insert $20 thing)” when really what they mean is “I haven’t saved for it or prioritized it.” Ramit Sethi (of I Will Teach You To Be Rich and GrowthLab) always says that it amazes him when someone complains about a $20 expense but won’t spend $20 to buy a book that will let them not think twice about that $20 expense (paraphrase).
Let me put this clearly:
It is better to spend more up front to learn faster than to spend lower over a longer period of time.
Time is of the essence in business. I firmly believe that we should all bias towards action, but better to learn as fast as we can.
You might be saying “But John, you are contradicting yourself here. You said that we should bias towards action but we should also save up. That takes time!”
You are absolutely right, but think about it that way.
You haven’t been spending anything on this channel yet. You hopefully have another channel that is already working, otherwise you would have already been spending on this channel.
What’s another 2-3 months of not spending on it so that you can save up to learn faster once you start investing in it.
Here’s a numerical way to think about it (I love explaining emotional things with numbers):
- Invest $2k over 4 months at $500/mo.
- Save $500/mo for 3mo and invest that $1500 in one month. You still only take 4mo. If you save for 4mo at $500/mo and spend $2k in one month, you’ll come out of the gate even stronger even though you’re waiting a month!
When it comes to any marketing channel, it is always better to spend more up front and then cut back the spend to maintain/invest for the long term than to start off slower.
Remember: you’re always spending something
When I worked at an agency a number of years ago, we had a saying that you are always spending something:
We liked to say that if you can’t spend money, you need to spend time and expertise. If you don’t have expertise, you have to spend money (and likely time). If you don’t have time, you have to pay for expertise.
It is very common to think about “spend” as just being monetary. When we expand “spend” to include the others, we begin to see that everything costs something.
You just need to figure out what you are willing to spend and adjust your expectations accordingly.
What additional questions did this bring up in your mind? Sound off in the comments!