August 22, 2023

Is Your Marketing an Investment or an Expense? Good Questions!

It's been an interesting week. We are in the dog days of summer. People are vacationing, getting their kids back to school, or just soaking up (or avoiding) the sunny days and warm weather.

Speaking of dogs. Our dog Layla picked up a case of the dog flu from doggie daycare. The daycare was incredibly proactive about closing down for three weeks and communicating with us pet parents.

When I took Layla to the vet, I brought copies of the emails they sent. The vet said, “Can we keep these? This is some of the best communication we have seen about the area outbreaks.”

Needless to say, I was sad about Layla (who is doing better after a dose of antibiotics), but very happy with our vet and dog daycare, particularly with their services and communications!

Pontification Potpourri

Speaking of communications, I've had a few Zoom meetings this week that stood out and I wanted to share about them. I understand that recapping Zoom meetings may not be the most exciting thing you read all week, but bear with me. There is a point I am trying to make (that I hope will pay off your time investment).

This was all prompted by a comment on a post on LinkedIn.

I call these graphics Baconisms. They are quotes from my books and speeches that I post every month.

The one that got the comment was, “Marketing should never be an expense… It should be an investment.”

The comment said, “Funny that it is oftentimes considered an expense when it doesn’t work and an investment when it does”.

He's not wrong. But this idea about how people define marketing when it works versus when it doesn't work got me thinking. How can we define when marketing is an investment or when it is a justifiable expense?

An investment has a return (ROI) and an expense can be qualified as a cost of doing business. In my world, I say that every marketing dollar should return three (another Baconism).

You should make one dollar to pay for the expense, one dollar to pay for your time to implement, and one dollar for profit.

I find that people just look at the expense and justify it by perceived sales, but they lack data to connect the expense to the sale.

The Poop Scoop

I am speaking next month at the annual convention for aPAWS, a trade association for professional pooper scoopers and pet professionals. Yes, there is an association of businesses that pick up dog poop. I'll let you insert your own jokes here, but it's serious business.

I had a Zoom meeting with my original pooper scooper who is now a national sales rep for a national franchised scooping business. We were comparing notes since we are both speaking at the conference and did not want to overlap or contradict content.

I have spoken at these conventions for years, so I know that most scoopers focus on homeowners and their pets. This time, I am speaking about trying to get more (or some) commercial business. My friend mentioned that scoopers do spend a lot of money advertising to replace lost clients. Pets pass, people move, so it can be a revolving door of clients.

In that case, we agreed that the ads do help replace lost revenue, but do little to create new business. The feedback loop of constant new business feels like a win, but it is more like an expense than an investment.

This will make my presentation a bit more of a challenge since creating B2b business sales takes longer and does require an investment upfront.

The win for them will be that commercial contracts will be more profitable and potentially long-term. After all, apartment complexes and other commercial spaces have a steady supply of new people with dogs without the stress of attrition, which drives their need to advertise.

The Corporate Conundrum

I had another Zoom call with a past client who has remained a good friend and even became a podcast guest. She works for a national company whose Chicago office hired me to improve their marketing with LinkedIn training.

We split ways about two years ago and she told me they were no longer using the website and systems that I helped them set up, but she did confirm that what we did was a good investment in their record success last year.

In the meantime, corporate had implemented a new sales CRM and purchased a lead generation system for them to use. She was touting how the systems integrate and nurture leads with a measurable ROI.

I knew of that leads software because they offer a free version that anyone can use. So I decided to explore how and if the paid versions could offer my clients or my team the same kind of success she was seeing.

Slicker & Sticker Shock

When I looked at the product's website, they had no pricing and offered up a form to schedule a demo. I wanted to use my client as the example because at this point I knew the pricing would be outside my investment tolerance but maybe not too much for my clients.

The sales system includes a pre-call to schedule the Zoom. I learned that they needed too much detail to use my clients' information so I acted as the guinea pig.

I have to say that the demo was slick and intriguing. Their system can not only find leads based on your keywords, but it ranks and finds people who have recently performed a web search for your type of products and services. They also have additional tools that can reach out and nurture those leads.

I asked how accurate that was, and the salesperson said that their data is 95% accurate. Then he told me that they use the free account to scrub people's computers to find contact information and search data.

If that sounds unethical to you, it's exactly the same model Google uses. They give you free searches and email accounts. Then they scrub your computer when using their apps to create data that they use to sell businesses. They are primarily in the ad-selling business which means their customers use your data to help them find new business (like the pooper scoopers).

Then came the pricing. It was between $2000-$5000 per month with a required 2-year contract. That means my clients would need to make $6000 to $15,000 or more in new sales every month to make it worth the expense. I do believe that they could, but I am not sure they would want to do that for two years without some additional proof.

Final Thoughts

I have no idea whether I can convince the scoopers to invest in B2b marketing or my clients to spend $5000 a month for leads. However, I do know that your marketing expense becomes an investment only when you can track the marketing dollars that you spend, and discover the path that turns those activities into increased sales dollars.

I know the key to B2b sales success is investing in your salespeople and their relationships. Those investments can create, maintain, and rekindle sales relationships through your marketing efforts!

“An investment in knowledge pays the best interest.”
– Benjamin Franklin

Comment below and share your thoughts, ideas, or questions about your love-hate relationship with sales and marketing! Do you feel your system is working for you? What tips or techniques can you share that worked for you and your business?

To learn more about this and other topics on B2b Sales & Marketing, visit our podcast website at The Bacon Podcast.

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