Do you need marketing?
“The spider looks for a merchant who doesn’t advertise so he can spin a web across his door and lead a life of undisturbed peace!”
– Mark Twain
Can a business run without marketing activities? What are the marketing activities? Marketing activities help a business sell their products through: branding, social media, advertising, public relations, SEO, email etc. I am just covering the most commonly used mediums. Anything that helps a company sell more (now or in the future) can be considered “marketing”. Knocking on 100 doors a day to sell your brand new educational program is marketing as well.
You get into the marketplace to sell. And to sell, you need marketing.
For example in Samurai PPC, we are specialized in the advertising section of marketing. Advertising and PR are probably the big movers of the marketing machine. Both require an initial large upfront investment from the business.
A well-accepted rule of thumb for businesses to follow is to spend 10-15% of their revenue (not profits) on marketing activities. Marketing is what gets you more sales than you currently have now. Almost every platform on the internet is selling marketing.
Facebook makes its money on selling advertising.
Google and Microsoft Bing make most of their money selling advertising.
YouTube makes its money by selling advertising.
LinkedIn makes its money selling advertising.
Twitter makes its money by selling advertising.
Whenever the user is on any free platform, and wonder how the founders are making their money on something “free” like Facebook and YouTube. Know that if the user is not paying for the product, the user is the product.
These companies make money by selling ads. They happen to sell it better because they have your personal information, they know your circle of friends, they know what you like and dislike, they also know your behavior patterns, etc. And they leverage them to interested advertisers who want to sell their products to you.
Mark Zuckerberg and Larry Page may not be admen but they make their money on selling advertising. E-commerce platforms make their money selling ads and charging people who want to run ads on their platforms.
Marketing is a vital element to any business
Marketing is a vital element of any business. Cut it off and it dies. If a business has no money left, it dies. But if a business does not put up initial money or effort to market its activities, it will die in time. If a business takes a risk and invests in marketing, at least there’s a fair chance it won’t die by the next quarter.
The problem is that it’s hard to sell marketing to most businesses, especially small ones. They do not understand that marketing is a vital part of their business and think that “customers will just show up in their door” and they don’t have to make an effort to acquire them. Most of them do not even have a proper website for their businesses.
“Customers will just see my listing or randomly type on my website over the internet. I don’t want to spend any money or time on marketing.” The reason why they don’t spend on marketing is that they don’t see how customers come in the first place. Your customers don’t just randomly wake up one day and search your business name on Google or call you and try to force their money into your bank account.
They have the sequence backward. It is not – I can’t spend time and effort on marketing because I haven’t made enough money.
But – you haven’t made enough money because you don’t have marketing.
They don’t realize that marketing is the only way of cutting through the noise in the marketplace so that customers can notice you. You need to keep appearing in front of your customers. Repetition is what makes the marketplace finally accept you. And initially, it may be considered a win to just break even in your business after including marketing expenses.
Businesses must be willing to invest a sizable portion of revenue on marketing, such as internet advertising, flyers, affiliate marketing, etc. You should expect to spend 10-15% or more of your revenue on marketing. So, let’s say if your company makes $1M this year, you should reasonably set aside $100-150k on marketing expenses. No businesses make money without investing in marketing, yes you may say SEO, organic search, and referrals bring in a lot of money for your business.
First, SEO is a marketing activity that optimizes your website search rankings in Google so you can get more visibility. It costs money to hire an SEO expert to do this. Secondly, regarding referrals; yes you may say they cost no money to acquire. You may be wrong, you had referrals because you had customers in the first place, you probably did marketing at some point before that customer converted and gave you their referral businesses.
You need customers before you can get referrals (even easier if you have an awesome business). To get customers you need to create market demand, and that is through marketing.
The bottom line is:
You can’t make money without initially spending money or effort.
I hope this post helps readers understand the importance of setting aside a marketing budget to invest back into their businesses.