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Marketing Investment Rant

If there’s one thing wrong with the way most business owners look at marketing, it’s this:

***Marketing is an investment, not an expense.***

Stop. Read that again. It’s important that we’re on the same page.

Let me explain.

Investments are things that pay you more money as you put more money into them.

  • When you invest in a 401K plan and you make 7% back, that’s a good thing.
  • If you have $1 in your 401K, you make $0.07 per year (assuming flat annual percentages, not APY). If you have $100,000 in your 401K, you make $7,000 back.

That’s an investment.

An expense is something you pay for that doesn’t provide a return.

For example, the janitor you pay to clean your office is an expense. If suddenly the cost of custodial services doubled tomorrow, you won’t make twice as much money.

Let me put some real numbers to this: We recently pitched a small business on an SEO package. The thing is, we’re really good at doing SEO.

I could tell that the owner was reluctant to sign up for the package. So we offered a great introductory rate just to prove we could get results.

And get results we did. Rankings shot up. We were on track to get them in the top 10 for a ton of important keywords.

But the owner got nervous. He wasn’t willing to put the money in.

He saw us as an expense.

Here are the actual numbers.

  • We were charging $1,000/mo for basic SEO.
  • That means he’d pay us $12,000 for the year.
  • A single client to them is worth well over $4,000

Let this sink in: we’d only need to get him three clients for the entire year to break even!

I’m confident we would’ve at least gotten them one client a month. That means they’d get a 4x return on the investment over the life of the agreement. No 401K is going to provide that return.

Why am I so passionate about this? Because we lost $12,000? Not really. I mean, sure the money is nice. But our business is fine without it.

The truth is: I actually feel bad for the business owner. 😔

Assuming we got one client per month (a conservative estimate), that’s $48,000 per year. Subtract our fees, he still walks away with $36,000.

That’s money left on the table.

He saw the $12,000 as an expense. But he didn’t end up losing $12,000. He actually lost $36,000.

That’s the difference between an investment and an expense.

So next time you hesitate on spending money on marketing, remember it’s an investment.

There’s always a risk. But measure your return. And if it’s good: keep investing!

Otherwise, you’re losing way more than just the fees. The opportunity cost could be huge. 💸

P.S. If you think you’d be a good candidate for our SEO packages, fill out our SEO form. We’re happy to review your site. But know this: we only work with clients that we can have a real impact. If you think you’d be a good fit, reach out.

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