How do you see marketing for your business — is it an expense or is it an investment? This may seem like a trivial question, but how you answer it will have a significant impact on the success or failure of your business.
First, I think it’s essential to define marketing, expense, and investment to make sure we are on the same page:
- An expense is the cost of operations that a company incurs. Expenses by themselves don’t create more money; they cost money.
- An investment is something you allocate money toward in hopes of creating a profit or material result.
- Marketing is getting someone who has a need or problem you can solve to know, like, and trust you.
What happens when you view marketing as an expense?
I think most folks see expenses as a burden. Don’t you? Nobody wants to assume more costs. Most of us are continually looking for ways to cut costs, aren’t we?
One of the first items I see people cut when business slows down is their marketing spend. This is probably one of the worst things you can do when business slows down. Without marketing, there are no leads, customers, and revenue.
Do you see the problem in viewing marketing as an expense? Marketing is not something anyone should consider as an option or a “nice to have.” It’s essential for the health of your business.
What happens when you view marketing as an investment?
Most people view investments as a way to create more money from the money they already have. You put money in, and more comes out. Investing is something you do (or at least should do) consistently.
When we spend money on marketing, we expect to make money or see a return on the money we put in. So, by definition, marketing is an investment.
When done correctly, marketing can and should be an amazing investment. Successful companies have figured this out, and they become almost unstoppable. For example, if you know that putting $1 into your marketing will yield a $2 return, it’s like printing money. Who wouldn’t want a return like that?
If marketing is an investment, how can I maximize my return?
Marketing success is all about the fundamentals. Michael Jordan said, “Get the fundamentals down, and the level of everything you do will rise.”
For example, let’s say you decide to pay a marketing agency $1000 a month to help you with search engine optimization so you can drive more visitors to your website. What if the messaging on your website stinks? Will SEO be a good investment? Probably not.
When you skip the fundamentals, you are severely handicapping any marketing effort you make. Getting the fundamentals in place before you do anything will make the most significant difference in the return on investment you see with your marketing.
What are the marketing fundamentals?
Marketing strategy is where everything should start. A strong marketing strategy will nail down who your target market is, how you communicate with that market (messaging), and provide a system or plan you can follow.
Most of our clients come to us completely confused about marketing. There are so many marketing channels and “hot” marketing tactics that make it hard to focus. Here’s the problem: When you are battling confusion in your marketing, creating a strong marketing plan is nearly impossible.
Your continued success hinges on getting these fundamentals in place before you start worrying about your website, SEO, social media, or any other marketing channel. And when you have the fundamentals in place, everything else will become much easier.
Peter Drucker once said, “Marketing and innovation make money. Everything else is a cost.”
Marketing isn’t a one-time event. It’s a process you will never stop and an investment in the growth of your business. Remember this, and it will serve you well in your business.
Tim Fitzpatrick is the president of Rialto Marketing. He spent 10+ years in the consumer electronics industry as a partner in a distribution company before getting into marketing consulting & digital marketing. He helps eliminate the confusion of marketing for system integrators so their business’ can grow.
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