Why you should start treating marketing like an investment account, not an expense account.

With the ebb and flows of the economy, it’s easy to treat marketing like an expense account: you know, the thing you put on your “nice to have” list, is usually the last thing you put money towards when you’re managing your accounts, and is typically the first thing that gets cut when there’s a recession.

There’s a famous Henry Ford quote we pass around in the marketing world: “A man who stops advertising to save money is like a man who stops a clock to save time.” Considering the man founded what is now one of the most successful automotive companies in the United States, we think there there’s probably a method to the madness.

Sure, Marketing is an Expense

If we’re going to be technical about the term, sure, marketing is an expense account. When it comes to bookkeeping, often times we see more money leaving the marketing budget than we do coming in. However, this is usually due to the way we track (or don’t) our marketing campaigns – leaving sales that were actually generated through marketing to be credited to the sales budget.

Take for example a newspaper ad campaign. While still effective, newspaper ads are notorious for being difficult to get an ROI from, and are typically categorized as a ‘brand awareness’ campaign rather than a conversion campaign (actually making sales). Unless you put a specific coupon in a newspaper, or put in a phrase ‘mention this ad,’ most times calculating the return on this type of campaign is impossible. And unless this is the only campaign you’re running at one time, there’s no way to determine the difference between your baseline sales (consistent average) to your promotional sales (sales brought in by the newspaper).

The importance of marketing strategy

A lot of times we see small business owners take marketing into their own hands – which is totally fine, if you know what you’re doing! However, just creating marketing content to create marketing content often times does more harm than good (and by that, we mean there are no promotional sales).

In order to ensure you’re getting a return on your investment, you should always approach marketing with a strategic eye. If you put a strategy behind your marketing, rather than throwing darts to see what sticks, you’re able to make your campaigns more effective. For example, if you’re a lawn care business, it would only make sense that you would want to market your snow removal services right before the snowy months, right? So why would you market those services in the heat of the summer?

Marketing strategy moves a bit beyond predicting the weather, but you can understand the point we’re trying to make. While you don’t need to overthink your marketing, in most cases you do need to figure out who your target market is, and the best way to reach them.

Can you afford to not invest in marketing?

In the digital age, small businesses just can’t afford not to market their business. Gone are the days when customers would magically walk into your store and give you their business; data shows that 81% of shoppers do research about a business or a product online before buying – meaning if you’re not marketing your business, you’re not going to be found.

The bright side to the rising need for being present online is that marketing your business digitally has become increasingly cost-effective; you don’t have to having a six-figure cash flow in order to run a social or paid search campaign. Spending as little as $50 a month to promote your business online can do wonders in bringing awareness – and customers – to your business. So ask yourself this question: can you afford to keep doing business with just the clients you have?