The Colorado Debacle refers to an incident when the state government, after a roller-coaster funding ride, decided to defund their state’s branding budget. As a result their market share plunged 30 percent the first year, a drop of $1.4 billion in revenues. In fact, Colorado went from ranking as the No. 1 summer destination in the United States to 17.
The next year, when the budget was reinstated, officials declared that it was “like starting all over again, and not picking up where they left off.”
Ever since then, the new crop of state officials treat their branding budget as an investment.
During difficult economic times, financial decision makers are naturally looking at budget cutbacks in all areas, including marketing. It’s easy to understand the temptation to cut marketing spending. However, the body of evidence suggests that doing so is a short-term panacea that would ultimately risk more than they think they’ll save. Why? Because marketing the city is an essential net generator of revenue and profits, not a cost.
John A Quelch, Professor of Business Administration, the Harvard School of Business may have said it best. "Ad spending rewards those who move forward and penalizes the timid; a consistent marketing effort enables you to solidify your base, increase top-of-mind-awareness, and take business away from less aggressive competitors while positioning you for future growth.”
Richard Branson, CEO and founder of the Virgin Group, was a little more colorful when he referred to short-term thinking to deliver short-term results as “gun to the head” budgeting.
The facts show that in just the past four months, Lee’s Summit has received a 200 percent return on investment on our branding budget in terms of total value received from actual dollars invested.
We’re still in the first quarter of the game. We have put a lot a points on the board and we have possession of the ball and we’re moving into scoring position. The question now is, are we prepared to finish what we’ve started? Or, are we going to take our ball and walk off the field.
James McKenna is the branding manager for the City of Lee’s Summit. Reach him at JMcKenna@lschamber.com.