Minimizing Risk in Small Business Internet Marketing

“You gotta spend money to make money.”

You hear this most often from people who are about to drop funds on crap they don’t need.

In business the idea that investment is required before you see a return is a given.

But “investment” sounds a lot like “risk” lately. Plenty of companies are closing up shop after decades, unable to navigate the now treacherous waters of this economy. Suddenly every cost deserves scrutiny. It’s time to get lean.

So how do you get and stay lean without chopping away at effective marketing? Can you optimize your budget and only pay for what works?

First of all, there’s a bitter pill we all need to swallow…

Risk or die

Life is risk. That goes for business and walking down the street. Trying to avoid all risk ends up being the biggest risk of all. There’s no better way to ensure your own failure than to sterilize yourself with fear.

That’s how PR departments neuter what would otherwise be viral marketing campaigns. They suck the souls out of them, because they’re worried about the risk of “damaging the brand.” Chances are your business doesn’t have a PR department – but there’s probably one in your head, worried what will happen if you get too bold or honest. Snuff that voice – trying not to make waves is a pretty good way to drown.

Fail fast, fail cheap

In my online marketing days I’ve done plenty of stuff I’d like to take back:

• Bought domain names that made me question my sanity the next day
• Started crappy websites, designed / wrote content for them and shut them down a month later
• Published juvenile articles on topics I had no business writing about
• Wrote whiny blog comments that brought well-deserved flames
• Ran pay-per-click campaigns that earned zero ROI

We all fail on a regular basis – it’s part of growth. You learn to ride your bike better once you skin your knees. You learn how not to handle an angry customer once the negative impact one of them creates spreads faster than you can control.

The trick is to fail in a way that doesn’t kill you.

Ways to market online without taking deadly risks:

• Launch an exploratory low-budget pay-per-click campaign – best case: you turn a profit, worst case: you gather data
• Start blogging often and let your missteps fly – best case: you connect with customers in memorable ways, worst case: nobody reads it
• Give your customers the bullhorn by allowing them to post reviews on your website – best case: people respond to your willingness to take heat, worst case: you learn a painful lesson about what you’re doing wrong (and can fix it)

Pinpoint your “worst case scenario” – outline it in detail. It’s almost never as bad as you think. There’s little room for being a perfectionist.

Measure everything

A web marketing campaign has two purposes:

1. To generate a positive ROI (the core purpose)
2. To provide insight/data on your market and users

Before you take on a new web marketing campaign ask this question: how will we measure success?

Setting the right goals and avoiding common web analytics pitfalls is nearly as important as the execution. Without specific goals and the means to measure them it’s impossible to:

• Determine success or failure
• Measure your ROI
• Pinpoint factors that contributed to your success or failure
• Use the data to improve future efforts

Predictable outcomes in web marketing would be nice, but it’s not that simple.

Ian Lurie of Portent Interactive said it best:

“An internet marketer can no more guarantee the results of a campaign than predict the weather.”

Instead of looking for guarantees aim to better understand the risks and set meaningful goals and criteria for measuring them.

And if you’re hellbent on getting a guarantee here’s one for you: if you avoid all risk you’re guaranteed to fail.