The Marketing Budget is an Investment, Not an Expense
I recently learned that a CEO I long respected, considered marketing a necessary business expense. This individual thought it was of questionable value and not a long-term investment. Whenever there was extra budget, the CEO opted to spend it in sales, hiring AEs or bringing on a new sales manager.
That explains why the charismatic leader, who should have been featured regularly and prominently in industry and business onlines, was largely absent from any coverage, as was the company. Evidently, Public Relations, a vital component of any marketing plan, was not considered a strategic investment either.
Unfortunately, this is an all-too-common occurrence. In many companies, marketing’s value appears to have diminished to the point where it’s almost irrelevant and sales is the all-important component of a company’s success. The focus is on creating a highly optimized mobile-enabled website for search and leads generation, while the rest of marketing is overlooked.
It’s unlikely anyone would argue that leads generation isn’t important. After all, without sales, a channel and a sales pipeline, the company will go bust. Yet, overlooking the marketing effort could ensure the company goes bust, too. Just not quite as quickly.
Marketing is as important as sales and sales should be able to rely on marketing’s expertise for leads generation and much more. Nothing’s worse for a sales manager who gets the all-important meeting with a project team that’s never heard of the company. Sales managers have to know what they are selling, who they are selling against and the value to the prospect without spending the time to figure this out themselves. That’s were Marketing can help build awareness and provide ongoing industry research and competitive analysis.
When a company invests in a new product, it should invest in the whole product ecosystem to make it successful. Marketing managers, presumably, did market research and validation to understand they need a product with the right features to solve a problem. Because it needs a pre- and post-sales support team who can understand the product, the company should invest in training and support materials. It needs a market ready to accept a product as well, which means investing in brand recognition. That’s marketing and not sales.
Marketing should be considered a critical part of the holistic product ecosystem, making it an investment similar to product R&D, not an operational expense or the cost of sales. It will last as long as the product itself.
The importance of marketing’s role in a product launch cannot be understated. Good marketing drives the brand awareness and perception, generating leads from various programs, such as events and Public Relations. An experienced marketing group will develop a plan that begins by conditioning the market for the new product, rolling it out at the right time and exhibiting it publicly at tradeshows, seminars and webinars. While some of these tactics seem straightforward, make no mistake – not everyone has good communications skills and the ability to take a technical concept and simplify it into a useful and salient message. And, let’s not overlook boothmanship skills. Few of us can step into the company’s tradeshow booth for the first time ready to engage with potential customers. Most of us need training on booth etiquette, which means, no chewing gum or eating, being friendly and making eye contact, among other dos and don’ts.
Ah, and then there are the companies who claim to know all the companies and all the engineers who would buy their products. Well, technical companies need to think more like consumer companies and their customers’ buying patterns. Consumers like to be reminded that they purchased their goods and services from a winner, which often is why consumer companies spend lavishly on advertising and other forms of marketing.
No, I’m not suggesting a tech company’s marketing department needs a lavish budget. But consider the CEO, like so many others, who sacrificed a long-term play to invest in marketing for short-term gains. It’s a mistake many companies are making as executives see marketing as an expensive and not an investment. A company needs to be to set apart and differentiated from its competitors it. Marketing’s job is to come up with the strategic initiatives, based on a continuous study of the marketplace. I recommend that the marketing department be allocated a reasonable yearly budget to build, maintain or enhance the company’s awareness and visibility.
About the Author:
Nanette Collins is a marketing and Public Relations consultant in the semiconductor, EDA and IP market. She received the 2013 Marie R. Pistilli Women in EDA Achievement Award.