Marketing is a
Long-term Investment
by: George Torok
"Dig your well before you're thirsty" is the title of a
wonderful book by Harvey Mackay. It is smart advice for
investing your money, "Save your money before you need it", or
growing your business, "Market today for tomorrow".
When times are tough some businesses stop marketing. They
reason, 'No one is buying so why should I advertise?' The
other time some businesses stop marketing is when they are
selling like crazy. Again they figure - 'I can't handle any
more business right now so why promote?'
Two key points here. Advertising is only one narrow form of
marketing. Marketing is about sending messages. You send
messages in a plethora of avenues; advertising, customer
service, by association, quality, public relations,
sponsorship, awards, etc… And the second point; marketing is a
long-term investment.
Selling is immediate. When times are slow you need to
crank-up the selling efforts. How do you escape from a sales
crisis? Improve selling skills, search out new markets, offer
more value and most importantly be systematic. When there is a
fire, put out the fire. That's sales.
Preventing the fires of tomorrow is marketing. That is why
marketing is so difficult to justify or measure. The good
marketing you do today will pay off in a few weeks, months or
even years. Is it worth it? Only if you want to be in business
in a few years.
Invest wisely in your marketing. Many of the principles of
investing money apply to marketing. Don't put all your eggs in
one basket. Your message must reach your prospect along
several avenues. That conveys more credibility. For example;
you might advertise in a magazine, sponsor a community event,
send out news releases and offer extras on your website. Your
investment portfolio should be diversified, so should your
marketing. Warren Buffet's long-term strategy to 'make smart
investments and hold' can apply to your marketing. Make a long
term marketing commitment to yourself. Stick to it. Be
consistent and persistent. That is smart investing and smart
marketing.
Consider the different forms of currency in your business.
Cash is the most obvious. A signed order is another.
Receivables are currency - you can even use them for
collateral - or sell them. But some forms of currency look
better than others. If cash is best then you might be tempted
never to give credit to customers. But you might lose sales
because of that. So you may decide to give credit to approved
customers - knowing that you can likely convert the receivable
to cash. Even signed orders are currency - you can factor them
to obtain financing.
Marketing is another form of currency in your business.
Good marketing creates customer awareness, goodwill,
education, credibility, even desire. All of that can be
converted into signed orders, receivables and hence cash.
All forms of currency are convertible. But the conversion
rate is not 1 to 1 nor is it totally predictable. Some
receivables become bad debt. Some signed orders get cancelled.
Some marketing efforts just spin off into the universe like a
lost asteroid. For that reason do not expect that every dollar
spent on marketing pays off the same. For example if you do a
mass mailing some of those envelopes go undelivered, some
never get opened, a few get read - and even fewer acted upon.
But you need to mail to the whole list to reach the ones that
read it.
You might believe that cash is a better currency than
marketing. Marketing can be better than cash because a
creative marketing campaign can pay back many times over. If
you realize that when you market you are creating currency -
you can view your marketing in a more productive light. The
more creative you are in your marketing - the greater leverage
you get.
Marketing like currency is synergistic. When you have money
the banks will loan you more - but when you have none and want
some, what do they say? 'You got none so we can't give you
any.'
Marketing works the same way. When you generate lots of
exposure - you get more. When you are hot everyone wants you.
When you are cold - you get the freezer. Keep sending your
marketing messages regularly. Some businesses get busy with
business and forget to market. And then the feast runs out and
they start marketing again.
Because marketing is currency there are times when instead
of cash you might accept payment in marketing currency. This
might be a straight barter deal. I give you $1,000 of my
product for $1,000 of your product. This is one way to get
'free' advertising. Trade your product for ad space or media
time. This only works if the media company needs your product
and don't have budget, (cash), to buy.
My financial planner gave me some good advice when I left
the corporate world to start my business. I showed him the
corporate package I received and asked how I should invest
this money - stocks, funds, or pay down my mortgage? He asked
a few questions about my business. He then advised me to
invest my money in the business because that is where I would
obtain the best return over the next few years - then
gradually as business growth levels or slows to invest in
other long-term investments. It was smart advice because
growing my business was another form of investment. I continue
to make both short term and long investments in my business.
You might examine your business in the same light.
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