If You Invest in Marketing Last, You Probably Won’t Last

This may be the point in the year when you and your company are starting to plan for the new year. This is typically the time of year when many start planning the next year's marketing strategy, objectives, and budget. It’s a time to look back at recent marketing efforts and evaluate what exactly they did to grow the company. Or, if you’re a new business owner and new to marketing, you may be determining what kind of expenditure you’ll need to drive growth through marketing. Either way, there’s something extremely important you need to remember to do: stop viewing marketing as an expense and start looking at it as a strategic necessity and investment.

For many companies and organizations, innovation gives birth to their business. While innovation may give them birth or rebirth, marketing is what keeps them alive and growing. I’ve spent the better part of the last 20 years marketing in the technology industry. My experience working as both an employee and as a fractional chief marketing officer (CMO) has given me some unique insights and perspectives. Many of the companies, especially start-ups, I have worked with and for have struggled with justifying their investment in marketing. The unfortunate truth is that more start-up companies fail than succeed.

Based on a recent study and postmortem of tech companies,?70% of tech start-ups failed within two years .?Why? There are several reasons but nearly half are related to customers. These reasons include not knowing their customer’s pain points, needs, and goals, listening to their customers, communicating effectively with their customers, and having a product or solution that their customers didn’t want or need. These customer failings are the direct result of poor — or no — marketing.

“Marketing is not only much broader than selling; it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of its final result, that is from the customer’s point of view. Concern and responsibility for marketing must, therefore, permeate all areas of the enterprise.” —?Peter F. Drucker

Many businesses approach marketing as an optional function or a function to be turned on and off as needed. This approach suggests they view marketing as a cost center expense more than a profit center. They are wrong. Dead wrong. Launching a new business or product without building brand awareness, knowing who the ideal customer is, and effectively communicating with them are risky decisions that undermine their present and future opportunities.

Companies that prioritize marketing ?are 13 times (13x) more likely to see a positive return on investment. In fact, marketing offers a 300% return on investment for young companies.

Because of their limited marketing experience and expertise, small businesses often use shotgun marketing tactics that waste valuable time, budget, and resources — yielding poor to no results. A more efficient and effective approach is to create a focused marketing strategy that will build brands, reaches target prospects in a cost-efficient way, and enables you to grow your customer base. Marketers who document their strategy?are 538% more likely to report success ?than those who don’t.

And take the time to get to know your customer and to understand what problem you are solving for them or what their aspirations are. Knowing your ideal customer is the most critical element of creating a successful marketing strategy and program that will drive business growth. Being truly customer-centric and taking the time to understand your customers’ needs brings benefits to your entire organization,?creating economic gains of 20%–50%.

There are some fundamental goals that the highest performing companies achieve through marketing, including:

• Awareness?— Customers won’t find your business if they don’t know you exist. Prospects won’t know about your products or services without you marketing those solutions. Through awareness, customers will remember and consider your brand when a new need or desire arises.
• Reach?— Reach is important because it involves how many customers are made aware of your business offerings. Invest in marketing to reach and convert potential customers that are otherwise never going to learn about you.
• Frequency?— Frequency is the number of times a customer is exposed to an idea or call-to-action.
• Branding?— Branding is what your company is in the mind of the customer. This is what differentiates you from the competition.

As Peter F. Drucker, one of the leading experts on management theory wrote: “Because the purpose of business is to create a customer, the business enterprise has two — and only two — basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.” Mr. Drucker had it right. Marketing is the central hub of any successful business or organization. Marketing produces results.

In the end, organizations shouldn’t think of marketing as being separate from the rest of their business goals and operations. Marketing should inform product strategy and design, price points, customer relationship management, and business planning. Organizations that invest in marketing last probably won’t last.

About the Author

Bray Brockbank is CMO and VP of Strategy for?Brandegy , a specialized brand and digital marketing agency for technology companies. Bray has led marketing efforts for various B2B and B2C SaaS startups and tech enterprises. He has also served as a fractional CMO for several SaaS technology companies.