March 26, 2009
A modest proposal for marketing
Note: the article below was originally published on the Capstrat blog, Field Notes.
What I’m about to say might be be considered treason, seeing as how I’m writing this on Field Notes. But I’m throwing it out there to open discussion.
What would happen if companies simply took their marketing dollars and reinvested them in their business?
What would happen if…
- an online retailer on-shored their call centers and hired more phone reps?
- a car insurance company used the funds to lower rates and pay more claims without hassle?
- a product company applied the funds to improving their product?
- a mutual fund paid its customers back in lower maintenance fees?
The scenarios above are somewhat fictitious. But the funny thing is, some similar companies exist. And some of them are pretty successful too. American Funds is one of the largest mutual fund companies with a commitment to low management costs. Zappos.com is a star retailer with a world-class call center and return policy (and one whose 800 number is easy to find!).
Now, their success cannot be solely attributed to a small marketing footprint–but their decision to forgo these costs is not trivial either. So would this strategy be good for companies?
Proponents might argue that this is a good thing. Why not use the money to make a better product, improve the experience, or differentiate on price? Surely, the resulting goodwill and word-of-mouth would step in for the formal messaging.
But would it? Detractors might say such efforts are doomed to being unnoticed. They might argue that companies like Zappos are edge cases. Or there might be differences in business models that make such a proposition implausible.
What do you think?
I have my own opinion, but I want to hear yours. Is redirecting marketing dollars back into the business a good thing? What do you lose in the process?