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There is no value in your business...



The value in your business is in the market and the market is in the minds of your customers.


The value that your customers believe they get from you is what they pay you for. This is where you get your profit. There is no other source. The only way to grow your business is to increase its value in the market.


The market doesn’t care how you produced that value. It doesn’t care what it cost you. It doesn’t care how efficiently you produced it. All it cares about is the value that it gets.


Costs are the unavoidable expenses of doing business. They enable activity, but they do not contribute to the value of the business. Every line item in your expenditure budget is a cost, except for R&D and Marketing.


R&D and Marketing are the only expenditures that contribute to the value of your business. You cannot grow your business without investing in them. They’re the only two investments a business can make.



Marketing investment has two returns: tangible and intangible. Tangible returns, such as ROAS, can easily be measured. Intangible returns, such as brand recognition, cannot be easily measured, but their contribution to tangible returns increases over time. Intangible returns are what marketers call the brand.



Expenditure on Marketing must be evaluated on its potential return, not on its cost.


Marketing is conducted in a world where thousands of brands invest heavily in vying for consumer attention. Your competition is not just your direct competitors, but everyone who wants your target audience’s attention. Marketing is therefore not a commodity, but a competitive sport. Like sport, some players are more talented or have a higher work ethic, some managers have better people skills. It’s these attributes that produce better results. While paying more is no guarantee of success, the cheapest option is never the best and focusing on price is looking through the wrong end of the telescope.


When evaluating marketing investment, a business should focus on value, not on price. The value of the investment is potentially several multiples of the price. Making the right investment now will set the business up. Making the wrong one will undermine it for years to come.



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