Marketing Wastes – 10 Biggest Marketing Wastes of the 21st Century

Marketing Wastes – 10 Biggest Marketing Wastes of the 21st Century



Waste #1: Failure to define marketing correctly and not identifying Marketing assets already in the business.

Waste #2: Failure to execute marketing inside before going outside!

Waste #3: Failure to build a marketing plan around the THREE WAYS TO GROW!

Waste #4: Failure to have a USP – Unique Selling Proposition

Waste #5: Failure to communicate and integrate the USP – on-going sales training

Waste #6: Failure to understand the Lifetime Value of a Customer

Waste #7: Failure to make advertising Direct Response

Waste #8: Failure to leverage relationships: Inside and outside the business

Waste #9 Failure to implement Direct Marketing

Waste #10: Failure to start marketing on the Web



Lean Marketing Follows the Lean Manufacturing Example

For many years, manufacturing companies have been working to get their employees trained in “lean” manufacturing techniques. These techniques primarily target areas of waste in a manufacturer’s operations, processes, equipment and labor. The objective is to eliminate waste and make the operations, processes, equipment and labor more efficient. By doing so, cash flow can improve because a company will be much better at delivering products to the customer when the customer wants it. No sooner, no later. There is less inventory on hand because the company has learned how to produce the right number of products and do so in a more efficient manner. Many times the cost of production, equipment and labor can be reduced to increase the bottom line for a company. Equipment is more efficient so a company’s return on equipment investment increases. The company wins and customers win with lean manufacturing.

This success in lean manufacturing is now moving into the area of “lean” office and “lean” healthcare. Other industries are adopting many of these “lean” techniques to lower costs and be more competitive in today’s world.

These same “lean” concepts can be applied to marketing. We are unique in introducing these “lean” techniques into the “top” line operations, processes, marketing resources (marketing equipment) and staff of a company. Our system seeks to eliminate waste and inefficiencies in all the marketing and sales or “top” line processes. Instead of “bottom” line cost savings, there are “top” line revenue increases which results in more profit or increased “bottom” line.

In other words – lean marketing and sales.

Business Owner Frustrations

The traditional definition of marketing has been the introduction of your company’s products and services to prospective customers. By reason of this definition, business owners have pursued the “traditional” avenues of marketing. These include: Advertising, hiring more salespeople, prospecting, direct mail, referral programs, web marketing and many more.

All of these traditional marketing methods can work – but many times they don’t (Don’t create a paying customer) and this leaves business owners frustrated. Sometimes they have invested thousands of dollars in these traditional methods only to find out they didn’t work or that in order to really work, they need to invest thousands more.

The business owners then go back to the providers of these traditional marketing methods and ask for accountability. The reply is usually something like this:

“Did the (marketing method) bring in more prospects?” “Yes, but they didn’t buy anything.” says the business owner. “Well, if they don’t become paying customers, we can’t control that – that is your responsibility” is the reply.

In other words traditional marketing method providers are not paid and do not concern themselves with what happens after a prospect is generated. Indeed there may be plenty of new prospects generated, but if they don’t become customers, it hasn’t helped the business owner! And, the frustration only grows.

Waste #1: Failure to define marketing correctly and not identifying Marketing assets already in the business.

The frustration grows partly because the definition of marketing is short-sided and inadequate. It is time for a new one. A new one for the 21st Century!

We have redefined marketing to be:

The introduction AND SELLING of your company’s products and services to PAST, PRESENT AND PROSPECTIVE customers by first optimizing and leveraging ALL of your company’s marketing assets.

With this new definition, marketing becomes concerned with what happens after a new prospect is contacted or inquires. If a business owner does not track and understand what is happening to a prospect immediately upon contact or inquiring, waste enters in.

There may be waste in that the right qualifying questions are not being asked, so salespeople spend time with the wrong prospects. Waste. It may be that whoever is answering the phone or greeting the prospect is not saying the right things. Waste. It may be that the prospect isn’t ready to buy right now but might be later. The company is not tracking this relationship and the prospect goes away. Waste.

Then, if a prospect does become a customer and is ignored or not included in the company marketing efforts in an on-going basis, then the customer will not buy as much as they could. Waste. And, if there is not good customer service and the customer leaves the company there is more waste. It is ten times as costly to get a new customer than to keep one.

To eliminate this waste required an acceptance of a new marketing definition.

Too many companies separate sales and marketing. Many times the two departments don’t even talk to each other. Waste. Selling is and always should be under the umbrella of marketing. Don’t separate the two. That creates waste.


Because of the inadequate definition of marketing that has prevailed, business owners think of marketing assets as only their advertising or the accumulation of new prospects and new customers. This is a very short-sided view of marketing assets – a waste.

You can find a list of marketing assets on our website, blog, and in other articles we have written. These include past customers, current customers, salespeople, the company’s advertising, referral programs, current sales and marketing processes, location, reputation, time in business, relationships with other businesses, etc. It is very important for business owners to “see” all of these as marketing assets. Not just those that create new prospects.

If a business owner will begin “look” at marketing in a different way – accepting the new definition, then they will begin to eliminate the wastes that occur under the traditional definition and find new sales and profits waiting for them.

Waste #2: Failure to execute marketing inside before going outside!

The traditional definition of marketing as discussed has forced business owners to always be looking OUTSIDE their business for growth.

What I mean by “outside” is working with traditional marketing resources for the generation of new prospective customers. This means going outside to find new prospects with advertising, tradeshows, web marketing, direct mail, salespeople prospecting, etc.

Because of this tendency to focus on MORE PROSPECTS with marketing, waste begins to creep “inside” the company.

The minute a prospect is introduced or inquires about a company’s products or services, they become “inside” the company. Now the real marketing should take over. This is where “hidden” new sources of cash, sales and profits can be found.

These prospects are having conversations, sales pitches, etc. directed at them by people, staff inside the company. The prospects have entered the sales process inside the company.

Every business in the world has the same sales process:

Prospect created ——-qualified——-presented——-closed.

There could be tremendous sources of “waste” along this process. It could be that the wrong prospects are being created in the first place. Waste. It could be that the prospect is not being qualified. Waste. It could be that the presentation made (either on-line or off-line, in person, on the phone, in an ad, etc. is not being done well.) Waste. It may mean the prospects are not being closed as well as they could be. Waste. It could mean that after they are closed, there is no on-going process of marketing. Waste.

It is everything that happens to a prospect AFTER being introduced that contains the hidden sources of new sales. It is what’s happening “inside” the company that is as or more important than what is going on “outside” to generate more customers.

This approach to marketing is more “non-traditional.” Most of our clients started out thinking the answers for more sales were in the creation of more prospects. But, soon, the system helped them uncover serious areas of waste and it was discovered that more sales and profits WITHOUT SPENDING MORE MONEY TO CREATE NEW PROSPECTS could be had FIRST by fixing and eliminating areas of waste. (Core Four Steps) Then, more resources could be devoted to generating more prospects because systems were in place to make certain there was no waste in the managing of the new prospect’s experience. So, all resources devoted to the creation of new prospects (Big Four) were maximized, leveraged to their fullest, creating maximum profit opportunities.

Doesn’t that make more sense?

Waste #3: Failure to build a marketing plan around the THREE WAYS TO GROW!

Every time I ask a business owner for a description or written copy of a marketing plan, the plan ALWAYS focuses on getting more prospective customers. This is to be done by advertising, web marketing, tradeshows, direct mail, telemarketing, salespeople, etc.

In other words, all plans are made under the traditional definition of marketing i.e. the introduction of a company’s products and services to prospective customers.

As indicated already, this definition is limited and incorrect.

There are three ways to grow sales and profits for any company. They are:

1. Increase the number of prospective customers contacted or inquiring

2. Increase the conversion rate of prospective customers to buying customers

3. Increase the value of worth of each customer

The marketing plans found at most companies deal only with number one – more prospects.

All marketing plans in the 21st century should revolve around ALL THREE!

If not, there is potential for tremendous waste. And, that is exactly what we find.

All business owners should hold their “marketing”departments and Vice-Presidents to the metrics or measuring of all three ways to grow. This way, assets become optimized. Waste is eliminated. The three ways to grow makes certain that all possible sources of cash and new sales are being considered.

Business owners should receive a weekly report from marketing that gives an accounting of marketing’s performance in all three areas. The conversion rate doesn’t only apply to salespeople closing sales. It applies to web click through and conversion rate, direct mail response rates, telemarketing response rates, etc. In other words, there might be several “conversion” rates in a company’s marketing process.

The “value” or “worth” of each customer is increased by doing more upselling on the front-end and more “back-end” selling after a prospect becomes a customer. Step number three in our system specifically focuses on increasing customer value.

The three numbers of prospect contact rate, conversion rate and value level are the three numbers a business owner should have a daily accounting for and should insist that the marketing department plan around all three ways to grow.

Waste #4: Failure to have a USP – Unique Selling Proposition

Unless any business owner or salesperson can tell a prospect in 90 words or less why they should do business with a company and not the competition, there is waste.

The USP is a selling proposition. Not a mission statement. Prospects and customers don’t care what your mission is. They only care what you can do for them better than anyone else. That is a USP.

Dominos Pizza created a stir with a 30 minute delivery or FREE USP. It took the company to the top of the industry. Now, all Pizza places can get you a pizza in 30 minutes. It is no longer unique. Dominos must now create a new USP if they want to get back to the top.

What is your USP?

A USP is not “good quality” or “good service” It must be more specific and if possible quantitative. If possible, it should be as overt and significant as possible. Not found in the fine print of a warranty statement.

If you’re unclear what your USP might be, listen to the top salesman in the company. They are often selling what it is customers really want.

Most companies think that “branding” is all they need to do. Again, branding is not a USP. It might be a description of your company or a position in the market your company wants to take. Again, these are not USP’s. They can support and help introduce a USP, but they are not selling propositions. A USP must be able to be sold.

If a business owner is not clear what the USP is, certainly prospects and customers won’t be clear. Look closely at the marketing assets of owner expertise, time in business, company credibility, to see if USP can be uncovered.

Talk to customers and ask them why they do business with you. Research and examine the competition to see what they might be selling as a USP.

However, the most important of all these is the competition. A USP is not necessarily what the owner thinks it is and even what customers might say it is. If the competition is doing it, it is not a USP. And, it must matter to the customers. You might have the most unique product available, but if customers don’t want it or don’t care about it, it is not a USP. Step one of our system focuses on helping a company develop a USP.

The USP is the first and most important part of any marketing plan. It must be determined first because it will then often determine which target markets should be pursued. It is the market research that should be done to understand the strengths and opportunities for the company. The USP becomes the “core” or foundation of all marketing and sales efforts.

Waste #5: Failure to communicate and integrate the USP – on-going sales training

Most of the time, a company can uncover and define a USP but then they fail to integrate the USP successfully.

Almost all USP’s fall short because the salespeople aren’t on board. They are not incorporating the USP into their sales presentations. A good USP integrated into a sales presentation can increase conversion rates significantly.

But, usually, salespeople go back to what they are comfortable doing.

A business owner must require the marketing department to see that the USP becomes integrated into all marketing and sales processes. This is from placing ads, business cards, brochures, displays, scripting for those answering the phone, etc. It needs to be incorporated into the sales presentations and any on-going marketing communication with customers.

The USP should be on the home page and incorporated into every other page of the company’s website.

This goal of complete company integration starts with the salespeople. That is why sales-training needs to be an on-going concern with any company. New salespeople need to be trained what it is they really sell! The USP. They need to always be trained in how to qualify, present and close more effectively. The more training done in these areas, the higher the closing rate will be. The margin between the company’s current closing rate and 100% is an area of marketing waste.

This is why sales trainers are paid a lot of money! They increase the closing rate for a company which translates into higher sales and profits! Less waste. When marketing is able to get sales integrating the USP, then implementation of the system is more successful. Salespeople are on the front line. They know what customers are saying and what they like or dislike. This can mean adjustments to the USP can occur regularly and quickly.

A company might have more than one USP depending on different revenue sources. USP’s change. They should be reworked and looked at on at least an annual basis. The key factor in change is what the competition is doing.

Waste #6: Failure to understand the Lifetime Value of a Customer

A big area of waste in a company is when marketing decisions are made on the one-time purchase of a customer, not the life-time value of a customer.

For example. A retail clothing company might do a direct mail piece or have a catalog as a way to attract new customers. Let’s say the mail piece generates 10 new customers that bought an average of $100 in retail clothing. That’s $1000 in sales. In this case, the cost of the mailing, postage, printing, etc cost $1,500.

The company concludes that the mailing didn’t work.

That is a waste. A big mistake. What is being wasted is the future opportunity for more customers! Why?

Let’s say this retail clothing company has a great product, good customers service and on average those 10 customers come back twice a year and spend $100 each time and keep coming back for an average of 10 years! That’s 20 return visits at $100 a piece or $2000. This times 10 customers is a total value of $20,000 generated all from a $1,500 mailing! $20,000 is the lifetime value of these 10 customers. Not to mention the referrals or family members they might motivate to come and start buying.

The waste is $20,000 in new sales opportunity because the company stops doing the mailing! They concluded that they lost money on the mailing because they calculated only from the first, one time purchase, not the lifetime value.

The industry that understands this concept very well is the music and DVD clubs. For $1.00 you can get 5 FREE DVD’s. We all know it cost the company more than $1.00 to ship 5 FREE DVD’s. What we don’t understand but the company does, is the lifetime value of a new customer. They have calculated that over time, or a lifetime of the average customer, there will be additional orders on average that more than make up for a slight loss in the original mailing.

This is how a marketing budget should be determined. As long as the cash flow can handle it, more and more testing should be done and evaluations made on the lifetime value concept. Even if a company needed to borrow money to do marketing, they may find out that marketing brings a better return than any other investment the company could make. This is often the case.

This lifetime value is the same information used by manufacturers in determining to purchase a piece of equipment. Up front, they may not cover costs but over the lifetime of the equipment, the return justifies the investment. Such should be the same thinking about marketing.

Waste #7: Failure to make advertising Direct Response

In the 21st Century, the investment required for successful media advertising can be very significant. Many business owners try to do a little bit of advertising in the paper or radio or billboard, etc. but find out they don’t get back any return. They become frustrated and upset.

There are two reasons for this frustration. First, there probably isn’t enough advertising going on in a synergistic way that creates results. If the company is advertising on radio, they might need to do newspaper and billboard as well. If they start marketing and advertising on the web, they probably need to do off-line marketing to support it. These costs and investments can become very difficult to maintain. A huge waste of money.

The second reason the advertising falls short is most are doing what is called “institutional advertising” rather than Direct Response advertising. They are sold by the advertising agency that “branding” and “positioning” is important. They are told that if they don’t advertise, their competition will and beat them to the customer. These are both possible true statements. But, not necessarily true.

Our recommendation to small business is to make all advertising direct response.

That is, make it create a response of some kind i.e. a lead, purchase or request for more information. That way, the advertising can be measured. It can be held accountable.

Direct Response is covered in step five and seven of our system. Briefly, there are several important elements that should go into every advertisement that makes the ad direct response. These elements include: Headlines, sub-headlines, good copy, offer, urgency, reply mechanisms, bonus, P.S., etc.

If a company will follow these rules, the advertising can be tracked and different testing accomplished. Institutional advertising simply tells people that the company is in business and has great service. There is no USP, offer, urgency, bonus, reply mechanisms, etc. Therefore, the company cannot measure results. A big waste.

By implementing direct response marketing into all advertising, different testing can be used to make the same dollar invested return more in leads, sales or even an opt-in E-mail database. Waste (in the form of non-producing ads) are eliminated.

Even with direct response, there is branding and positioning that can be accomplished. At the same time, if there is room in the marketing budget, branding and institutional advertising in and of themselves can be effective.

It’s simply the case that most small to medium sized companies can’t afford both types of advertising.

Waste #8: Failure to leverage relationships: Inside and outside the business

Whether a business is just getting started or has been in business many years, one of the biggest wastes that occurs is the failure of the business to examine how relationships with other businesses and customers can create a lot more sales.

These are referred to as endorsements and alliances. They are covered in step four of the system.

The most significant marketing asset of any business is the customer base. A business owner should know which customers can lead the business to more customers. An endorsement is secured and an endorsed mailing is sent to the clients and or customers of the company’s customer. This can open the doors to thousands of prospects – WITHOUT SPENDING MORE MONEY ON ADVERTISING.

So, the rule should be to examine the 20% of customers that are generating 80% of the business. Approach them for an endorsement (of the company’s USP) and work out a regular endorsed mailing. This failure to use customers in this way is a big marketing waste.

In looking at the 20% first approach those customers who are already giving the company referrals. This endorsement simply becomes a more formal consistent way to generate more referrals.

Then, look outside the company database. Look to complementary businesses that have customers or clients your company could serve.

Approach these businesses with the same endorsed mailing opportunity. Maybe you can endorse them to your customer base in return!

Don’t let these relationships go underutilized – such a waste.

Waste #9 Failure to implement Direct Marketing

Throughout my consulting experience, I have come close to creating the CORE five. This would include Direct Marketing step #7.

This is because the most underutilized marketing asset in any company is the phone. It is so inexpensive yet can yield so many new profit opportunities. Any use of phone could be classified as direct marketing. It can be used to generate leads, repeat business, upselling, close sales, follow-up on prospects, etc. Yet, many companies don’t use it as they should.

Much of the same could be said now for E-mails. They can do much the same as a phone – contacting prospects, following up on presentations, upselling, creating newsletters, etc.

Direct marketing includes: direct sales by salespeople, E-mail marketing, Web marketing, teleprospecting and telemarketing, direct mail, etc. These are all marketing methods that can be tested on a small scale, without risking a lot of dollars to find out which can work and which won’t work.

One of the biggest marketing wastes is that companies roll out marketing in big numbers before testing on a small scale first. One Artist’s marketing director invested $20,000 to print and mail 20,000 catalogs to museums. Not one sale. He should have tested with 2000 first to see if anyone was interested. This would have cost $2,000 instead of $20,000. He wasted $18,000.

There are probably staff members in every company that could test offers, etc. on the phone. Contact top customers to upsell or invite them in for a special offer. Salespeople can be calling during downtime.

Clearly, one of the biggest wastes today is that companies are not testing direct marketing on the world wide web. Waste #10.

Waste #10: Failure to start marketing on the Web

The technology of the web has evened the playing field between large companies and single owner companies. What a great opportunity for small businesses. Yet, most still don’t even have a web site. What a waste.

Internet penetration is now at 69% for North America. The number of high-speed internet users almost doubles every year.

The first objective of course is to get the company a USP. From there, you can determine if this USP can be sold over the web either by providing more information for prospects to learn about your company or actually creating a sale – E-commerce.

Yet, the purpose of this section in the report is to encourage all companies that have static information websites to begin thinking about how they can make sales from their site. You can test a pay per click campaign for less money that you can do a direct mail campaign to learn the same things.

The international usage of the web is also expanding. Asia has 418 million users, Europe 322 million, North America 233 million and Latin America 110 million. With those numbers growing year by year, there could be an opportunity for any company to sell something to them over the web.

Internet marketing – is your website making enough sales is addressed in the bonus step of our system. It is important to make an evaluation of your website and have the help of others in determining how best to use the web. This is why this bonus step is also considered part of the Big Four. You’ll need the help of designers, programmers, marketers, SEO experts, etc. to succeed, whether you do these tasks yourself or outsource them to others.

As long as you stay away from the web, there is waste. Even if you have a local store that sells only locally, the web resources can be a big help in creating more sales and profits. Learn how to use this technology to your benefit and eliminate that area of waste in your marketing.


I hope this free report has been of help to you. Even if you don’t become our customer, you can find new cash and new sales by eliminating these areas of waste in your marketing. And, if you do become a customer, I’m confident you’ll be able to systematically eliminate all of these wastes by implementing our system into your business.

Either way, I hope you’ll find great success in your marketing efforts.

And, while you are busy working harder, but not smarter, many CEOs are totally FEDUP of your lack of creativity and collaboration skills.

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