When you start a business there will be lots of people telling you to try this and that way of marketing, as though it’s the law. They tell you that you have to advertise or go to trade shows to get yourself known. But the fact that more than half of all new ventures in the UK close within three years of opening, if there is no return on these marketing investments within a fairly short time frame, then the chances are that you will run out of cash before you reach your first anniversary.

It all boils down to ROI…Return on Investment. Most people would agree with the idea that ROI is difficult to measure for many marketing activities. If that’s the case, then don’t do them! New businesses cannot afford to gamble their precious start up capital on things that ‘may’ work, and even established businesses need to see a return on their marketing expenditure if they are to achieve their targets and stay ahead of the competition.

As with everything, there is a smart and a not-so-smart way to get the most out of your marketing. Here is my top seven steps to achieving marketing ROI.

1.  Is there a bottom line benefit?

Don’t be fooled by people who tell you that you need to advertise for awareness. This is a luxury of the global brand. As an SME or new business, you need to advertise to generate new business leads from your key markets. Brand advertising can come with time, but initially focus on getting the messaging and targeting of your adverts right. The key here is to monitor everything you do carefully – you need to build up an understanding of what works for your business and the style, techniques and messages that really have an impact on your bottom line. While it may be a nice idea to sponsor your son’s football team, will it bring in new business or just a load of muddy shirts every Sunday? Before investing in anything consider carefully what you want to get out of it and what, realistically, it offers.

2.  Go for scalability. 

Look at the marketing activity and ask yourself: if this works can I invest more and continue to get the same level of return, or will I be a victim of diminishing returns? Marketing is key to any growing business, but you need to justify your marketing spend and ensure that you are getting a good return on your investments. Equally, if you are onto a winner the law of product lifecycles means that you only have a limited window before the competition catches up or technology supersedes your service.

The secret is to keep your eye on the ball. Don’t sit back and think something’s worked so it will continue to work. Good marketing means continually monitoring and evaluating what you are doing, looking at how the return on your investment develops and keeping abreast of what else is happening in the market. Your marketing activity needs to grow and develop with you, supporting you at every stage of your launch and development.

3.  Go On-line before you go Off-line.

The modern day equivalent of a shop window or corporate brochure will be your website. This is perhaps the most important early marketing component for most new businesses. Care should be taken not only to get the site to reflect the image and values of your business but also to take into account Search Engine Optimisation (SEO) so that you can start to generate valuable traffic to your site. Talking expert advice here is recommended as SEO is a complex subject.  It is also amazing how many SMEs still do not take advantage of the Pay-Per-Click advertising on Google (the ads at the top and right hand side) and the other search providers. This is a highly effective and manageable form of advertising, which offers excellent ROI so long as you are careful about the search terms you choose. The more specific you are, the cheaper the cost per click and the better the conversion rate. If you are not taking advantage of online lead generation, you risk being left behind while your competitors race ahead of you.

4.  Work to a plan and a budget.

The best way to avoid unplanned marketing activities with no certainty of ROI is to have a costed plan. If there was never any intention of advertising in Northants Business Weekly then you will have no problem telling the rep that it just is not part of the plan. Likewise, if people try and persuade you that if you don’t go to this year’s Business Expo people will think you have gone bust, then let them think that. It’s not part of the plan! Businesses that develop and use a marketing plan go on to outperform those that don’t by an average of 30%, underlining the importance of setting out what you plan to do, when and how much you will spend on it.

Set yourself clear, realistic and measurable targets and stick to your budget for each and every marketing activity. Poorly thought out objectives and knee-jerk reactions will only cause you problems. Just because a competitor starts advertising somewhere doesn’t mean you have to. The plan should give a clear indication of where your business will be in 12 months time and how you will get there – take advice and plan carefully and you should achieve it without exposing your business to soaring costs.

5.  Don’t get carried away.

You know the situation. You get a call and you are so glad someone wants to talk to you that you set off like a greyhound without qualifying the prospect. The trouble is that many SMEs rely on cold call telemarketing where we convince ourselves the contact wants to buy our products or services. In truth the contact has probably little, if any, knowledge of the company, and has only agreed to a meeting with a small level of interest. Few people consider they may be dragging you from Peterborough to Inverness for a half hour general chat and a cup of tea (if you’re lucky). Good telemarketing and qualification of leads where ever they come from is essential.

6. Network like your life depended on it.

Some of the best ROI marketing you can do is to start networking with old clients, former colleagues, schoolmates, prospects, suppliers…anyone else who knows you! If you don’t use your contacts to get word out about your business, then who will? There are numerous ways to network face to face and on-line. If you have not already try the excellent LinkedIn. It’s also worth remembering to ask them for referrals. They may not be looking for a direct mail agency but they may know someone who is, and by spreading the word you’re far more likely to pick up new business.

7. Be Honest to yourself.

The key thing in running a SME marketing programme is to be ruthlessly honest with yourself. Ask yourself where your new business comes from, and then go back and do some more of what really gave you a measurable ROI. Don’t try and convince yourself it was the charity golf day that did it when you know very well it was the phone call to your old client, the direct mail letter you sent out locally, or even the 20p you spent on pay per click for the search term “Taxidermists in Tansor”.