Marketing: expense or investment?

Is marketing an expense, or an investment? Your answer to that question will determine how much of it you do, and how successful your business is as a result.

I believe marketing is an investment. And the most important thing a service business owner can invest is time.

Most service businesses rely on so-called "word-of-mouth" marketing. The key elements which make this type of marketing work most effectively are knowledge, expertise and guidance.

These are things which can be bought or hired. But for most small-medium service businesses, knowledge, expertise and guidance have more value if they are transferred to the business owner or manager.

This requires the business owner or manager to spend time (and some money) on that process.

Sometimes business owners have a mind-set that they cannot afford the time or the money.

They see marketing as something which should only be bought (not learnt as well) and therefore they see it as a cost.

Marketing does not cost. It PAYS!

If any other area of business generated an output several times its input, not just immediately but on an on-going basis, it would be called an investment.

But because marketing involves a monetary cost, it is defined as an expense. No-one thinks about the return.

Business people often take a similar attitude to spending time on marketing.

This is especially so in service businesses which charge their clients or customers by the hour.
A working proprietor or partner has the attitude that paying clients or customers come first.
While this loyalty to the people who are the basis of the business is commendable, it has some unfortunate side-effects. One of these is a focus on personal productivity which can become all-consuming.

Anything which is not "billable time" is seen as an erosion of profit potential. Time spent on marketing gets lumped into that category.

This causes business owners and partners to become extremely reluctant to commit time to marketing activities – unless the flow of business has dried up to the point where they literally have nothing else to do!

Former Harvard Business School professor and global consultant to professional service firms, David Maister, spends several chapters on this issue in his book "True Professionalism". One passage in particular, identifies both the cause and the solution:

"There exists, even among the best professionals and professional firms, a perverse belief that only billable time (chargeable time spent serving clients) really counts," he writes.

"Anything non-billable is viewed as either worthless or not as valuable as 'real work'. While most firms have incredibly tight monitoring and control systems for billable time, few have effective procedures to manage their non-billable time. This is a mistake which should be obvious to all concerned.

"What you do with your billable time determines your current income, but what you do with your non-billable time determines your future."

Another reason many service business owners are reluctant to invest time (and money) in marketing, is that it does not have an immediate return.

Where services are intangible, where users may not require the service regularly, or where the customer is a business, it takes time for prospective users to become clients. An investment of time and money today is not going to generate a monetary return next week, probably not even next month.

With the prospect of a more distant return, the need to make the investment somehow seems less immediate, especially when there is paying work to be done.

Find out what you need to spend time and money on to market your service business. Ask for "The 11 Marketing Habits of Highly-Effective Service Business Owners", a special report which is available free when you subscribe to the monthly "Coach's Notebook" email newsletter (also free).

"The 11 Marketing Habits . . ." are areas of action which, when applied constantly and consistently, lead to more effective marketing of a service business. It includes key quotes from American small business consultant Michael Gerber, author of "The E-myth Revisited"; Harvard professor and professional service firm consultant David Maister, author of "True Professionalism"; and Albert Gray, who wrote "The Common Denominator of Success".

To request your copy, click here.