March 20, 2023
It’s not unusual that a business owner says to us I don’t spend any money on marketing. And our answer is always, of course you do.
There’s a deep misunderstanding among business owners about what marketing is. And it’s partly marketers’ fault. We can’t agree on what marketing is or what a marketer does, and we’ve failed to properly brand and market marketing.
One thing we can agree on is that marketing focuses on four elements of a business: product, place, price and promotion. We call them the 4 Ps of marketing. And when people say that they don’t spend any money on marketing, most of them mean that they don’t spend any money on promotion. But promotion isn’t the only marketing activity.
The costs associated with bringing to market a great product or service are marketing costs. Great products attract and retain customers. So anything that you do to improve the quality of the product or service you provide, counts as marketing. In fact, we would all be better off if we focused a little more on making better products and not just better ads. A client is not happy with her order so you comp it. That’s marketing. Anytime a customer is not satisfied with the product or service that we offer and we decide to eat up the cost because we understand the long-term value of keeping the customer happy, that's marketing.
A company also has to decide on the best way to make said product or service available and easily accessible for customers. Deciding to have a physical store, hiring employees and training them to help customers are important marketing investments. The signage, the decoration, and all the other things you do to create the right atmosphere are also part of your marketing budget. To increase convenience for the customers, you might opt for an online store or choose to have both– a physical location with an online store. A website that communicates well who you are and what you do, is easy to navigate and has an easy checkout process costs money of course. And it’s marketing dollars well spent since your website is often where your company makes its first impression.
From a customers’ perspective, price is one of the most important markers they use to make purchasing decisions. They use it to understand where your product or service falls in the market, in terms of quality and value– especially when they can’t judge it in absolute terms. Deciding to take smaller profit margins in order to attract or accommodate a specific market segment is a marketing strategy. It’s also not uncommon for business owners to run promotions or discount their product or service to attract clients or move inventory. The costs associated with these pricing strategies are also marketing costs.
Even free promotion isn’t really free. Thanks to social media, it’s possible to broadcast to a wide audience, without paying any money. But is it really free? If you’re even moderately successful at social media, then someone is responsible for running it. Usually, when businesses don’t want to “spend” money on this function, the responsibility falls on the owner or an employee. But how much money does it cost a business, when the owner is busy running social media? How much is that owner’s time worth? Whatever the answer, that’s marketing costs.
It makes sense that people naturally consider marketing as a megaphone. When they think of marketing, they think about telling as many people as possible about their brand, products and services using various media–TV, radio, billboards or publications–which of course costs money. But ultimately, anything you do to earn customers’ attention, trust and loyalty, is marketing.
We love to share
The secret to marketing is helping customers find the path of least resistance
The best way to create a competitive advantage is to have a clear guiding philosophy.
How we helped a nonprofit raise money without compromising its values.