In many circles, marketing is often incorrectly seen and treated as a cost. This is particularly problematic as the psychology around making a purchase is very different to that of making an investment. In fact, regularly, it’s this mindset that impedes good decision making and reduces the scope of what marketing can achieve.

Purchase Vs. Investment

Whether it’s in our personal or professional lives, when we look to make a purchase, the majority of us will aim to reduce costs where we can, providing our needs and preferences are still fulfilled. However, when we make an investment, we seek to maximize our return, placing all available budget in the highest yielding opportunities; whether that be property, ISAs or shares. The contrast here is the principle of ‘investing everything for best gain’, in comparison to ‘withholding some by saving it’.

Think of it like this. If you had a budget of £10,000 for a new car, you could spend half the money, save £5000, and still have a car that does the job. This makes good sense, but the approach doesn’t apply when making an investment. If you had a budget of £10,000 to invest, but only chose to risk £5000, then you’d be cutting your potential returns in half. And as any astute investor will tell you, the opportunity cost of not investing the other £5,000 is far greater than the £5,000 saving.

Marketing is an investment, not a cost.

 

Keeping a bit back

It’ll probably come as no surprise to you that many corporate buyers often avoid disclosing the budget they have. As a consumer and buyer myself, I completely understand this philosophy. The thinking of course is that if I disclose that my budget is £100, 9 times out of 10, the quote will come back close to that figure. Information is power after all. By keeping that figure hidden, I can collect quotes and pick the cheapest that meets my needs. But this is the problem, by taking this approach I have entered a spend-save cycle, as opposed to a healthier invest-return cycle. By not discussing budget, I only focus on saving, not investing.

Marketing is an investment, not a cost.

 

The dirty B word…    

Speaking of budget, it’s a word few marketers are comfortable talking about – and a term they’re even less likely to be upfront about. As you can imagine, this is a problem, particularly when it comes to maximizing the revenue from your investment. Knowing the budget is critical for context when it comes to decision making. For example, picture telling your accountant that you want the best return on your money, but don’t want to disclose how much money you have. How are they supposed to make a valuable proposal without that information? Should they recommend property? A cash savings account perhaps? Or maybe even just a piggybank. The amount of money you have will influence the final decision. The same principle often applies in the world of business.

Marketing is an investment, not a cost.

 

Mindreading

I can think of no situation in which advice from an accountant or investor would be at its most value without the knowledge of the figures involved.

In most financial discussions, the first lines of questioning go as follows;

  • How much are you looking to invest?
  • What returns are you looking for?
  • Do you want short or long-term returns?
  • What is your payback required?

This insight is critical for providing context on the final output. I would not trust advice on my personal or corporate finances from any professional who did not have this information. You have to talk about money to make money.

Marketing is an investment, not a cost.

 

Being an investor

As a marketer, I have nothing to gain from being ineffective with the use of budget. The problem is, without knowing the value of it, I struggle to effectively allocate money and resources to drive the best results possible. The demand creation strategy and tactics applicable to budgets of £25,000, £100,000 and £500,000 are vastly different, just the same as they would be for a financial advisor.

Marketing is an investment, not a cost.

 

Marketing is an investment, not a cost

Until the common perception around marketing changes, the pitfalls of treating it like a cost will continue to inhibit its potential. As an investment, marketing offers the opportunity to drive significant scalable returns. As a cost, its influence is reduced as it doesn’t have the necessary freedom to be all it could possibly be. The truth is, how marketing is treated will influence its overall impact, effectiveness and success.

Remember, Marketing is an investment, not a cost.