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One of the most common mistakes made by business owners today is where to spend marketing dollars. The ever so common strategy of throwing money at an idea and seeing if it sticks can bleed a business dry very quickly. Most small business owners are so concerned about getting new business that they never ask the important question of "will this produce a viable return on my investment?"

Before you spend your hard earned money on a particular marketing/advertising campaign, here are some important factors that need consideration:
  1. Complete a Cost vs Return On Investment (ROI) analysis
    • How many sales will it take to make up cost?
    • If you can't make a ROI, will it have an impact on your branding or positive effect on future business
    • Establish turn around time. How quickly will you get a return once you spend the money?
  2. Qualify target market.
    • Is it the right market?
    • Do they have the spending power to buy your product or service?
    • Is there a current need or demand?
  3. Determine relevancy (just because it worked 5 years ago, doesn't mean it will work today)

  4. Establish competitive edge
    • Why should they buy from you instead of the other guy?
    • Do you present a clear value over your competitor?
    • Is  that value important to your market?
Here are some other basic common sense ways to qualify your marketing or advertising strategies:
  1. Determine whether or not if you would be influenced as a customer by the medium you are planning to use. No matter how great of a deal it is, if your target market is not interacting with that form of media then you will not get your return on investment.
  2. When was the last time you used a physical phone book to find anything? Chances are that unless your customer base are the  elderly and/or they do not have internet access, then you are wasting your money. Tell the yellow pages rep to get lost.
  3. Radio advertising can be costly, however, a well placed ad that targets your specific market can have some great influence in acquiring new customers and obtaining brand recognition. Make sure you get specifics on the stations demographics and times the ad will air; this will quickly let you know whether it will be worth you time and money.
  4. If your competitor has been doing it for years, chances are that it is working for them.
  5. Direct mail does work for certain industries, however, the average ROI  is usually only 1%-5%. Unless the direct mail is going out to your specific target market, you are probably not going to get the results you are looking for.
Finally, a good rule of thumb when considering spending money on a particular campaign is to listen to your instincts. If you have any doubts that it will work, then probably those doubts have merit. It doesn't matter who you are advertising with or what medium your are marketing through, everyone want your advertising dollars. Don't give in just because they say it will work, do your homework first. The advertising sales reps will always have a reason why it is urgent that you take action.