I think marketing teams need risk management planning, just like investors. In fact, there are lots of similarities between marketing channels and stock market investments.
For starters, the goal of investing is to maximize profits while accounting for risk. The strongest marketing approaches follow a similar path: a balanced “portfolio" of resources spent across a diversified range of marketing platforms.
Yet this diversified marketing approach is much harder to pull off in practice. Oftentimes businesses put too much faith into a single marketing channel, placing all of their resources into the platform that already works for them.
Let's say that a business invests heavily in content marketing, spending most of their resources creating blog posts and not much else. This can be the equivalent to the risky practice of being a single stock inventor and putting all of your money on the outcome of a single stock.
I recommend that marketing teams focus their efforts like an investor would handle risk management planning. To do this, let's look a little bit closer at the similarities between marketing channels and financial stocks.
1. Both vary in performance over time.
A marketing platform's effectiveness can change drastically.
Perhaps a platform loses popularity and less people visit it, causing a drop in referral traffic. Maybe the demographic of the platform has shifted away from your target demographic, sending less potential customers to your website.
Very seldom do marketing channels remain static in their effectiveness over time, as they are constantly changing and evolving.
2. Both are subject to sudden events.
The markets are sometimes volatile, changing suddenly based on the whims of outside factors. The same can happen with marketing channels: An algorithm change can completely change the amount of traffic referred to your website.
For example, if Google has an algorithm update, there's a chance that one of your high-ranking pages could be knocked out of the first pages of search results. Or maybe Facebook has another algorithm update to their newsfeed and your brand's post visibility plummets.
These are real events that happen frequently that you and I have no control over.
3. There are always new opportunities.
The markets frequently add new stocks and funds, giving investors more and more options to choose from for their portfolios.
The same is true with marketing channels: There are always new opportunities. These opportunities might come in the form of a completely new platform or a new feature added to an existing one.
Effective Marketing Risk Management Planning: A Three-Pronged Approach
My three-pronged approach to marketing with an eye towards risk management planning is very simple and consists of three parts: improvement, discovery and pruning.
1. Improve and invest in current channels.
It's exciting to try new potential marketing platforms. But I believe the most critical part of marketing is to improve on the channels that are already working. Whatever platforms are bringing you the most return, I recommend that you continue to strengthen and improve upon it. There's always room to get better.
The most important thing is that, no matter what, you are not taking resources away from the channels that are already working.
2. Try new channels.
Trying new marketing channels allows for future growth, and can help ensure that marketing fates aren't tied to the success of a single platform.
Fortunately there are always new marketing channels to try and experiment with. New social networks are frequently added, new technologies introduced (i.e. voice search), and new ad platforms debut often. And let's not forget about all the current marketing channels that your business might not have tried yet.
Sometimes even trying a new feature in an existing platform can be all it takes to make a channel effective. When Instagram added their Stories feature, for example, some marketers found success utilizing the new feature when earlier iterations of Instagram hadn't worked for them.
3. Shift focus away from old or unprofitable channels.
Some businesses keep using resources on channels that are unprofitable to their detriment. While perseverance is an admirable quality, continuing to invest resources into channels that don't work is a failing strategy.
I believe that companies continue to do this because there is a popular notion that businesses should “be everywhere"—always available to everyone on any channel. Yet I see countless Facebook brand pages littered with posts with zero engagement, and as a consumer that speaks negatively to their brand as well.
If a platform is bringing you zero engagement, dump it. You don't have to have an active and popular social profile on every network known to mankind. Shifting focus from these under-performing channels can help free up time and energy to try new platforms and strengthen existing channels.
Consider making risk management planning essential to your marketing. I think it's the closest thing to a future-proof marketing approach as there is, keeping your marketing from becoming stagnant, while improving what's already working.
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