Issue link: https://read.dmtmag.com/i/454549
FEBRUARY 2015 24 THE JOURNAL Is Marketing an Expense or an Investment? BY SCOTT STROUD MARKETING CONSULTANT If you ask your accountant that question, there will be no hesitation. "Marketing is an expense. See, it's right here in the debit column." Worse, too many of us view marketing as an unwarranted expense. When times are tough, the marketing budget is the first one to get slashed. If you view Marketing as an expense, then I can candidly say that, whatever money you're spending on that expense, you're spending too much. Why? Because if you're more concerned with the expense than with the results you get, then you won't get the results to warrant the cost. The conversation typically goes like this: Business owner to accountant: "How much did we spend on marketing this month, and what do we have to show for it?" Accountant: "We spent $xxxx, and as far as I can tell, sales were flat. We could have used that money in a more productive way." So, you both walk away shaking your head and blaming your Marketing budget for your woes. On the other hand, your marketing is an in- vestment when it has a clear purpose and you measure it with the right metrics. Frankly, your accountant can't tell you if your marketing is pay- ing dividends or not, at least not immediately. Accountants and bookkeepers can tell you what happened, not what's happening. And Market- ing is really a current event that leads to future events – the effects take at least some time to gage. Marketing is an investment if: • It has a purpose; • You have a plan; • You are specific in who you are marketing to, you know what they want, and you focus on what you want them to do and why they should act now; • You understand the correlation with Market- ing, Sales and Cash Flow (in, not just out); • The effects are tacked, monitored and meas- ured correctly; • It is regular tested and adjusted. Purpose The purpose of marketing is to attract buyers, set their expectations, and get them to take action – call you or visit your sales center. It should start the sales process and set up the questions that the sales interview will answer. To be most effective, your Marketing message and Sales Message are virtually the same – Marketing captures the inter- est and raises the question in the prospect's mind (i.e. "How would my life improve is I lived in that home?"), and Sales answers the question in a compelling way. The purpose of Marketing is to capture more buyers. Plan I'm amazed at how few businesses compose a marketing plan. Can you build a home without a plan? Of course not! So, how can you build a successful campaign without one? When Market- ing doesn't follow a plan, then it's rarely success- ful. Too often I see business owners 'trying new things' without a plan or measurement in place to gage its effectiveness. Before you do anything, answer some key ques- tions: • Who do you want to reach? • What do they want? • What is your compelling solution to their pain/problem? • Who are you competing with? • What makes you the best choice? That's very rudimentary, but those are the key questions on which to base a Marketing Plan. Re- ally, it can be started on the back of a napkin! But until you know exactly what you want to ac- complish, any advertising you do is likely to be an expense, not a good investment. Track, monitor and measure. 80% of actions are wasted if you aren't measur- ing and tracking results. You must have in place a system that not only implements, but also puts in place specific metrics to measure impact and re- sults. EVERY successful business owner, no matter the industry, has learned to track the ef- fectiveness of every process they implement. Know how the numbers correlate. Every person has a heart rate, a blood pressure rate, a cholesterol rate, etc. But most of us rarely check them unless we've had a health scare. Your business has rates that you should be watching too, but probably aren't. Visitor Rate: The number of unique visitors to your website or new calls from advertising; Taffic Conversion Rate: The number of new prospects that you get to come into your sales cen- ter; Sales Conversion Rate: The average number of leads a salesperson must speak with to get a sale; Realistically, you should be able to put your fingers on those statistics for each individual cam- paign and lead source you use – website, media, print, etc. And most importantly, continue to track how your incoming leads relate to monthly sales. Again, there are systems we use that auto- matically track these numbers and give you a vi- sual 'real-time' report at a glance, so there's no excuse for not knowing your numbers. Test, test… and test some more. Small, almost unnoticeable changes in how you compose and deliver your message can have mon- umental effects on your results. I've seen two headlines that were very similar to each other tested, and found one would pull nearly 10 times as many leads as the other. If you're publishing what you like, rather that testing to see what your buyers will respond to, then you can put your marketing in the 'expense' category. My recommendation to you is that you test to find what works, use that as a baseline, then keep testing until you find something that works bet- ter. Also, what worked yesterday may not be ef- fective today. Your market is in a constant state of change; you're messaging need to continually be adjusted to keep pace. Every penny you spend in your business should be considered an investment and should result in a profit. That includes your marketing. And since so much is at stake, a good marketing con- sultant can help put in place the processes that will allow your marketing to make you money by meas- uring the impact on sales, and affecting continual improvement. Scott Stroud is Business Development Manager for Power Market- ing & Advertising, a full-service marketing firm working exclusively with housing companies and communities. Scott is a Certified Mar- keting Automation Specialist with over 30 years of exceptional results in marketing factory built homes, and can be reached at scott@Power-marketing.com or at 240-420-6343. T J