Marketing is an Investment, Not an Expense

By Zachary Clark, Director of Business Development

There’s a number of different ways we as human beings think about marketing. There’s the websites we have to represent our companies. There’s the TV commercials that interrupt our favorite shows or the billboards we see on the drive in. There’s the statistical data that we gather from research and the audience profiles we build. There’s the way we design our stores and outfit them in a way that motivates purchasing. This list could be endless, but at the core of all of these activities is marketing. Sure, there’s other elements in there such as sales, design, programming, public relations, psychology, statistical analysis, and that list in itself could be endless.

But, there’s one scenario in which many of us think about marketing in the wrong way: as an expense. From business school to those who self-taught themselves accounting software, we all know that “marketing” or “advertising” goes on the expense line in your income statements. Although we can’t fundamentally change that since the neighborhood accountants might have a coronary, we can change the way we truly think about spending our marketing dollars: as an investment. 

Let’s define an investment: spending money or capital in order to gain profitable returns. So, when you spend money on marketing, what do you expect to get in return? Most likely that comes in the form of short-term goals such as immediate sales, new customers, signups, etc. Or, long-term goals such as brand awareness which in turn makes it easier to sell later. The point being that we spend money on marketing in order to get something in return, just like the definition of an investment. You don’t spend money on redoing the website because it makes you feel good. No, you redo it because it’s going to persuade more customers and the cost of getting the website professionally designed and developed will pale in comparison to the benefits of getting a number of new customers through the door.

However, what’s usually the first line item to be slashed when times get a little tough or a company decides to be more “lean”? It’s marketing. When, if you really think about, marketing should be the item to invest more in so you can then spur sales and get revenue back on the right track.

We hear it all the time when a prospective client comes in: “We need more customers.” “My sales are stagnant.” “I want more people to contact me through the website.” This is all great, but you need the money to invest in your marketing to solve these problems. When your mindset is “marketing is an expense,” you only see the dollar figure you’re losing instead of the future value you’re gaining in return. You spend $15,000 on your website, but now you’re poised to take on those number of new customers that will cover the $15,000 and then some when you build a long-term relationship and continue to upsell.

If you always think of marketing as an expense and just a line item that’s simply there to decrease the amount of money you take home, you’re doing it wrong. Can you be successful with that mindset? Sure. But, will you ever reach the pinnacle of what the company is capable of? Never.

Sure, the neighborhood kid could build you that website or you could do it yourself through some templated platform. There will always be someone’s wife, husband, or relative in the office that can design a brochure or your new logo because they can fool around in Photoshop. But, the few thousand dollars that you save now, is it worth it in the long run when you don’t get those new customers because your materials look like amateur hour? In my opinion, no. It’s like school. You’re cutting corners on the homework expecting you’re going to do well on the test.

Take the time, the money, and the resources to invest in your marketing. At the end of the day marketing will go on your income statement as an expense, there’s no way to get around that, but hopefully you now think that it’s really an investment that will help you grow and achieve your goals. Just “getting by” isn’t going to cut it anymore when the competition in almost every industry is more fierce now than ever before.

If you don’t take the time and money to invest in yourself, who is going to take their time and money to invest in you?

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