Along with hundreds of other tech geeks…i mean bloggers…I was lucky enough to attend Blog World Expo 09 in Las Vegas this past weekend. Unfortunately, while in Vegas, my allergies were causing me to almost hack up a lung (doctor did confirm it was allergies, not H1N1, so don’t worry), but the way I see it is if that’s the closest thing to a disease you get while in Vegas you’re doing pretty good.
One of the panels I attended was Jeremiah Owyang‘s on the “Future” of Social Media. The panel itself was very interesting, but someone raised a question that I found particularly intriguing that didn’t get discussed as much as I had hoped.
The question was “Why not slash 90% of your marketing budget and plug that money into product development and customer service?” I don’t know the name of the man who asked this (if you do, let me know so I can include it), but his point was why not just build a killer product, treat your customers like they’re each your #1 priority, and let them market your product for you?
Personally, I think that the theory behind this idea is a good one for your company to operate under, but in practice it’s not going to work (usually).
The main glaring problem I see here is about perception. Let’s pretend you do this and create an “A+” product, where your closest competitor creates a solid “B” product that’s good, just not AS good as yours. The thing is they have a $200 million advertising budget that tells everyone their product can lay the smack down on yours, whereas you’re letting your product speak for itself. Once their product starts picking up steam, it’s going to have to really disappoint their customers in order for them to want to switch to your product.
Basically, your product is still only as good as your marketing leads people to believe.
Having said that, focusing on making a kick-ass product and treating your customers like royalty is still a tremendous way to do business. This will definitely help generate buzz, but you’re going to still have to put in some work to perpetuate and build on that buzz. Just look at Apple. They focus on building killer products and have a pretty good customer service record, but they’re still spending millions upon millions in advertising all over the place to make sure you know how awesome they are.
What do you think? Would you be ready to slash your marketing/advertising budget by 90% to focus on product development and customer service?
{ 5 comments… read them below or add one }
This is a good question and definitely debatable.
Instead of directly answering the question I might ask another question like: “How much time are you focusing on customer service?” Or “What kind of marketing initiatives have you implemented?” Both are important, but without a killer product you will have an empty marketing campaign and customer service won't quite exist because there won't be many customers.
It's also interesting to note that marketing budgets are often the first to be 'canned' or have less money (small businesses, etc.) but word of mouth and viral marketing can be pretty powerful. When I receive amazing customer service, I serve as a marketing rep for X company also because I love their product. However, I like to see companies out there marketing, offering new ideas and being creative. It's a good mix and the balance is important.
PS. I hope you're feeling better
Don't you love answering questions w/ new questions!? You're right there's definitely other factors that need to be considered on a case by case basis.
I was always told in school that, like you said, marketing is usually the first budget cut, but that companies who either maintain their marketing budget or increase it in recessionary times almost always come out ahead of other people. That may not convince the CFO, but it gives us a little ammunition in the marketing department!
It is a great 'phylosophical' question, and it is on the way to becoming a practical question.
And as you know, just a few years ago it was not a question at all!
It is a great 'phylosophical' question, and it is on the way to becoming a practical question.
And as you know, just a few years ago it was not a question at all!
It is a great 'phylosophical' question, and it is on the way to becoming a practical question.
And as you know, just a few years ago it was not a question at all!