Copyright 2006 Raynay Valles

What do many companies do when sales are low?

They cut costs, all costs, even marketing costs. They say, "Marketing is an expense. We're cutting expenses. Period."

WHEN YOU THINK OF MARKETING AS AN EXPENSE

In accounting, sure, marketing IS an expense. But here's what happens when marketing is purely viewed as an expense:

Company A thinks of marketing solely as an expense. When busniness gets slow, Company A cuts marketing. They tell fewer prospective customers about their products. Results: They get even less business.

You might ask, "How can you suggest that marketing is something other than an expense? Of course it's an expense - it sure isn't income. I write it off my taxes every year. You bet it's an expense."

If you think of marketing only as an expense, the odds are, your marketing is nowhere near as effective as it could be.

There is another way of thinking about marketing. When you spend money and buy stock, that's an expense AND an investment.

When you buy a rental property, that's an expense AND an investment. (Whether they are good or poor investments is another subject.)

What would happen if you thought of your business marketing as an investment?

WHEN YOU TREAT MARKETING AS AN INVESTMENT

Something happens when you look at marketing as an investment. You start to require that it makes money. You will begin to look for a return on investment. For example:

Company B thinks marketing is an investment. Every time they spend marketing dollars, they track how much business it

brings. They see what's working, so they can do more of that. Results: They get more sales and waste less money.

You may market with newspaper ads, email newsletter ads, postcards and more. How do you know exactly which one is working?

HOW TO KNOW WHAT WORKS

You don't need to put in a lot of time to find out what works. Notice how other businesses track their response.

Every time you see a commercial that says "Mention this ad for a free gift," they are tracking how well that ad works.

Every coupon you see is a way for a company to track an ad. Every time someone asks, "How did you hear about us?" they are tracking what works.

When your marketing is an investment instead of just another expense, you'll hold it accountable. It's a small but important change in viewpoint that can add to your bottomline.