In many businesses, whether they’re small or large, marketing is seen as a cost. It’s a revenue-taking part of the company – something that is just another line item in a budget full of expenditures that need to be cut in order for a business to turn more profit.
Businesses that think like this do so for a variety of reasons. They may have never seen the benefit of marketing because they achieved success without really marketing themselves at all. Sometimes that happens (particularly with older companies).
Other times, a business owner has been burned by ineffective marketing campaigns in the past – whether it was something the business tried to do itself and just didn’t have the skills or knowledge to execute, or it was a campaign run by an outside agency that also didn’t have the skills or knowledge to execute.
Finally, business owners have a natural aversion to spending money. Marketing just may not be something they see value in – or if they do, it’s a nominal value, one that is still predicated on marketing being a cost.
In reality, if executed the right way (and that’s a big if), marketing is an investment, not a cost. In other words, you should expect to receive more money back than what you put in, just like if you were funding a 401(k) or picking stocks.
This sounds simple, but it’s really a profound paradigm shift for many business owners. Again, owners have an aversion to spending money. But most of them – and all of the successful ones – don’t have an aversion to investing money if they think there’s a good prospect of a return.
It’s just that no one has convinced them that marketing is likely to lead to ROI.
Part of this is our fault, and by “our,” I mean the marketing industry. There are a lot of bad marketing practitioners out there. That’s par for the course for just about any industry, but the bad apples in the marketing bunch have done a pretty good job of sowing distrust in the business world, by either focusing on their own profits first – no matter what that meant to the client – or not adapting to the changing times and explaining the virtue of something like social media or Google AdWords or some other game-changing technology.
Put very simply, a lot of marketers have done a lot of bad work that has cost their clients money without delivering a return, and that has soured many business owners on marketing as a whole.
I’ve seen this a lot in the digital marketing space. When digital marketing became a thing, not too long ago, a lot of traditional marketing players decided to jump on the bandwagon and say, “Yeah, we do digital too.”
The problem is, they were trying to do digital with a traditional mindset, which doesn’t work. And they didn’t invest in themselves, either; they would hire people straight out of college and didn’t know how to train them properly because they didn’t know digital themselves. Or, they would hoist the digital marketing duties onto an overworked staff of traditional specialists and assume that it would all take care of itself.
In the process, they wasted a lot of client money and didn’t deliver much in the way of results.
We marketing professionals haven’t always done a great job of demonstrating and explaining how marketing delivers a return on investment. We’d like to think we have, but in reality, there are many businesses that still see marketing as dollars going out, not coming in. So, much of the blame can be laid at the feet of the marketing industry.
That doesn’t change the facts, though. Marketing, when executed properly, is an investment. It is designed to bring in new customers and keep your current customers. And to be honest, everyone understands how vital it is – even if they don’t know how to do it or who they should get to do it for them.
And yet, there’s still a trust barrier with business owners. So how can an owner get through the barrier to see the value of a solid marketing strategy?
Digital marketing offers a great solution by doing something traditional marketing can’t really do: offer solid, tangible proof of success.
That’s because you can track just about anything in digital marketing – whether it’s website traffic, clicks, downloads, views, purchases, leads, etc. We can develop very sophisticated sales funnels that track a user from the initial contact with the brand all the way through the close – and then even beyond, as they turn into a valued customer and start referring your brand to their friends and family.
We can do this because of online technology that uses data gathered from a million different places across the Internet to do what marketing should do:
- Identify a potential customer;
- Find out what that potential customer likes and dislikes;
- Create a message that resonates with the customer;
- Figure out where that customer is in the digital ecosystem; and
- Deliver those messages over and over again until they’re a customer.
At each step, digital technology gives us powerful capabilities. For example, we know a terrifyingly large amount of information about users online. We can target, with pinpoint accuracy, virtually any group of people with very specific demographic and psychographic characteristics.
We can then follow them throughout the Internet with advertisements, directing them to specific websites tailored to inform, persuade, and convert, using a full armory of psychological tools. We can figure out where they’re coming from, where they’re going, how long they’re staying there, what they’re looking at, what they’re watching or reading or listening to, what they’re clicking on, and where they’re going from there.
Along the way, we can figure out how much it cost to get them to do what we wanted them to do, and how much return we received for it.
This entire process – from start to finish – is impossible to achieve with traditional marketing. And yet, for decades, traditional marketing has been the primary method for reaching customers. So it’s no wonder that business owners are hesitant to believe that marketing can deliver ROI – they’ve had to treat it as a cost for years.
(And even in today’s digital revolution, that mindset persists.)
By adopting a digital-first mindset, instead of a traditional-first-and-digital-too-I-guess mindset, a business owner can do what he or she wants: make more money and prove that they’re making more money.
This isn’t to downplay the value of traditional marketing, and not all forms of digital marketing are appropriate for every business. But one overwhelming strength of digital is how it can be used to prove ROI – to attribute every bit of success to the specific actions performed to achieve that success.
That reality alone can go a long way toward helping business owners view marketing as an investment. Suddenly, marketing isn’t just another line-item on a budget. Instead of saying, “We’ll begrudgingly give marketing 5% of our budget because we have to,” a business owner can say, “We’re going to pour every extra dollar into marketing so we can explode our revenue.”
When you view marketing as an investment, you can adopt an aggressive strategy that is really the only way to play. Businesses in this day and age can’t be reactive and passive. They have to be assertive at the very least, to simply maintain their market share, let alone grow it.
And as businesses continue to catch onto digital marketing – a Gartner survey found that 67% of chief marketing officers (CMOs) expect to increase digital ad spending in 2018 – competition in the digital space will only increase. Business owners are now faced with a dilemma: either adopt a marketing-as-investment mindset and get on board and compete, or keep viewing marketing as a a cost and get left behind.
Smart business owners will inevitably take the first option, but far too many are taking the second option. With more education on the purpose and capabilities of marketing – especially digital marketing – an investment-minded focus will be more commonplace, and more businesses will prosper as a result.
A digital-focused mindset, solid strategy, and competent, skilled team to execute, when combined, can help deliver ROI for a business. Business owners who want to outgain the competition can adopt this philosophy and revolutionize how they operate moving forward, and outpace the also-rans who still view marketing as a low-priority cost.
For more information on how your business can take advantage of digital and prove ROI, download our 2018 Online Marketing Blueprint.