My blog is about exchanging ideas and best practices on all things marketing and communications related. I'm interested in your thoughts, feedback, additions, arguments and point of view.

Sunday, August 19, 2007

What is the Marketing Cost of Doing Nothing?

I remember being asked that question by a manager more than 10 years ago. What if I didn't spend demand generation dollars to bring a product to market? What would happen? Could I remove promotion and be confident about the results? It's a question I believe is worth asking when you develop a marketing plan.

I had finally finished a software product launch plan I'd been working on for 3 months – an introduction that was strategically important – new technology and features our customers were asking for. The budgets were approved and allocated to various programs – primarily direct mail, PR, promotion. The metrics plans and forecasts completed – low, medium and high sales scenarios with corresponding costs and profitability.

Then after presenting the plan, answering the usual questions and getting through the internal approval process discussion, my manager suddenly asked, “So what if we did no promotion to launch this product and just got it on store shelves– what do you think our sales will look like?” Hmmm – that was the one question I hadn’t anticipated. After all I had an approved budget allocated and ready to spend. Doing nothing...I immediately thought of the night before - working till 1am preparing for this meeting.

For most of us, our nature as marketers is to do– develop a thought out approach we believe will be impactful, measurable and drive ROI. We assume we are going to spend money to launch a product into a category and watch the investment pay back. However what if we brought a product to market without pushing a launch button and spending promotion or advertising dollars? What would the market forces do without our inputs? What if corporate priorities changed overnight? Could we create customer awareness, interest and trial without spending demand generation dollars? How would the savings impact the P&L?

Before you answer the question, here are some business planning resources you may find useful:

1. Pragmatic Marketing - teaches a practical, market-driven approach to creating and delivering technology products to market.

2. Project Connections – A great resource of project management tools and templates.

3. –a research firm specializing in tracking for readers what works in all aspects of marketing (and what does not.)

4. – when the hour is late and you need a little creative distraction:

One of the reasons Canadian marketers are held in high regard is that we know how to create impact without spending enormous sums of money. Always looking at a glass half full and rising to a challenge is a natually Canadian trait it seems.

For any product or program launch you develop, include all the possible scenarios and trouble shooting – but add this last question to your list – “What if you spend nothing” - and see if it generates new, creative ideas as a result.

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