Do you think you need to create a new and exciting ad, update the company logo, and/or send a new direct mail piece? Think again. Many times these tactical solutions are superficial at best because no one has taken the time to look internally at some of the barriers which prevent marketing tactics from working. Giving the house a fresh coat of paint will not necessarily help it perform better.Most marketing tactics have been proven to work when used appropriately. The first step to find the right marketing mix is to locate the barriers that inhibit a positive ROI before investing in tactics. Understanding your company’s resources and how they are deployed will start to give you a clue.
Let’s look at one area that is almost always overlooked as a barrier to a positive marketing ROI – capacity.
How does capacity affect marketing?
Many owners I encounter tend to look at capacity as a non-issue, especially professional service providers. They feel capacity can be expanded at will as the company grows so they refrain from taking action until expansion is absolutely necessary. What they fail to realize is that inadequate capacity can defeat the best marketing plans. Let’s look at one common example.
A service company decides to hire a salesperson to increase revenue or assigns this responsibility to an existing employee. Time and effort is spent training, educating and motivating. In six months this salesperson starts to turn leads into profitable business. However the owner, believing he could easily expand as necessary to accommodate growth, finds himself scrambling to find appropriate talent. Obviously his planning was inadequate and the problem is compounded since the salesperson now finds himself spending much of his time fielding questions about delivery and service, leaving him/her with less time to sell. This affects his effort to get new business (in some cases unconsciously). This inadvertent slow down in the sales process doesn’t affect the business immediately. However, by the time capacity reaches the proper level, the salesperson is not bringing in sufficient business. There might even be some loss of existing business. The owner is frustrated, the salesperson is frustrated and the dollars spent on marketing tactics to generate leads are being wasted.
Being aware of the relationship of capacity to ROI will help you structure sales and marketing efforts accordingly and make better, more profitable decisions.