There is good marketing and bad marketing......and a lot in between. But shockingly, there is a large group of suppliers in the HR space, especially those with revenues under $10 million, that invest nothing in marketing and PR. I call them the "Do Nothings". In marketing, doing nothing is bad - real bad. I know a former CEO of a pharmaceutical company who used to say to his managers "do something - even if it's wrong". He hated complacently. Perhaps a better assessment is given by John Sumser in a recent Electronic Recruiting News:
"Great ideas with bad understanding of the market coupled with unimaginably small marketing budgets and ideas is normal for our marketplace. Of the 50,000 vendors aiming for the fabled HR Decision maker, less than 1% have adequately budgeted for their own success. For the most part, entrepreneurs in our space act as if you're the dummy when you don't see their brilliance."According to our research many leading and rapidly growing HR suppliers spend between 10-20% of their revenue on marketing. So if you have revenues of $1m, you should be spending at least 100k in marketing and PR each year to establish and build brand (publicity), drive traffic to your web site and generate leads.
What can be worse than the Do Nothings? The Stop and Go'ers who are summed up by the old saying "don't confuse motion with progress". Suppliers who adopt the "Stop and Go" approach to their marketing and PR may run a 1x ad one month, send out a press release the next month (probably not even search optimized) and then do nothing for a quarter. Bad. Real bad.
Typically, the owners of these Do Nothings and Stop and Go'ers don't appreciate the power of marketing - or just have no idea what to do. It's foreign to them. Many are former engineers or HR practitioners turned HR supplier business owner and really do not appreciate that marketing, like accounting, management or manufacturing, is a discipline - with established rules, best-practices and processes.
I had a wonderful discussion with one of these individuals this past week. The owner of an HR consulting and OD firm called me because she was thinking about investing in marketing and PR and acknowledged she did not understand it but knew for her company to continue growing she needed to invest in some marketing and PR. But she was still a bit hesitant. I asked her what would happen if her clients invested in a single management training course and then did nothing for a year or two. Would the client see any dramatic improvement? No. The client would have to offer regular trainings and incorporate a culture of improvement into their workplace. We agreed that marketing is no different. It has to be a part of the culture.
Another excuse of both Do Nothings and Stop and Go'ers is money. We don't have enough money (do we ever?). Years ago I worked for a cowboy entrepreneur who when the company was on the verge of barely making payroll used a bank line of credit to fund a massive direct marketing campaign. It worked and enough business was closed to keep the doors open and pay off the line of credit. Today, the company thrives.
I'm not advocating reckless spending on marketing but if you want to grow, you need to allocate monies to a marketing and PR budget and regularly execute.
So as we enter the budgeting season for 2008, my advice to suppliers who want to grow their business is this: Make the commitment to marketing and PR, make the investment and have the discipline to execute, execute, execute......
PS- To help suppliers better allocate their marketing and PR budgets in 2008, sign-up to receive our 2008 HR Supplier Marketing Research Report (coming in 2 weeks). It will have lots of information on where HR suppliers intend to spend their marketing and PR dollars in 2008.
Posted by Mark Willaman
Labels: marketing budget, marketing budgeting