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Why You Should Invest In Marketing: 5 Ways Marketing Gives Your Business A Return On Investment


Most accountants say you need to invest at least 5% of revenue into marketing, but very few small businesses actually do that.

What often happens with small business is that you try out a marketing or advertising campaign, but don’t see a huge difference or an instant impact so you cancel it.

Then someone comes along and says "you need a new website." So you invest in a new website -but it doesn’t make a big difference. So you try something else, and nothing seems to work. 

3 Factors Which Affect Marketing Return On Investment Timescales

In order to get marketing to work, what you need to do is be consistent, and you need to be sustained with the way that you do it. The reason for that is because there are three things that influence how long marketing takes to work: 

  1. The time it takes your strategy to become effective - for SEO to take effect, or for a Google Ads account to be honed, etc.
  2. The average time it takes for potential customers to make an enquiry – not all enquiries are instant. Many are made after a prospect has visited your website several times, sometimes over a period of weeks or months.
  3. How long it takes to convert an enquiry into a sale - in other words, your sales cycle.

At JDR Group, we’re constantly investing in marketing ourselves, even during times when cashflow has been an issue, when it makes sense to pull the marketing back. We’ve always been on the front foot and because of this, we’ve seen the long-term benefits. And since 2004 we have seen what has happened to businesses that invest in marketing and those that don't - and there are 5 ways that you see a return on investment from marketing.

1) Direct Sales

Leads and enquiries that you convert into sales, these sales are directly attributed to the marketing you’ve paid for  - for example someone clicks on a Google Ad, makes an enquiry there and then, and you convert it into a sale. This is how most business judge return on investment from marketing, but there are a lot more ways in which marketing pays you back!

2) Lifetime Value

Every new sale can become a lifetime customer, and also lead to new referral customers, reviews, and case studies which create even more business. What many businesses don’t realise is that you get much more value from a sale than just that one transaction. If you treat that new customer right, it could end up turning into years, even decades of revenue.

3) Influenced Sales

Existing prospects and existing customers can be more likely to buy as a result of the increased activity, visibility, and improved messaging. These sales are not attributed to marketing (as they were people who were already aware of you), but without the marketing they may not have happened.

4) Future Sales

Every person that sees your ads, reads your articles, or receives your emails could come back to you in the future. At JDR, we've certainly had enquiries from people who say they have been watching our videos or reading our content for years before they finally get in touch.

In addition, inbound marketing produces long term results which last long after the activity has stopped. Investing in SEO, content creation, and building an opt-in marketing database create long-term marketing assets which can generate business for years to come. Watch the video below to see this in action.

5) Insight, Knowledge, and Improved Systems

Properly measuring your marketing, implementation of a CRM system, and learning/understanding marketing strategy can all pay you back over time.

So, there are five ways that marketing pays you back, and generates revenue in your business. If you evaluate every marketing activity purely based on what it generates (direct) in sales while it is running, then you are massively underestimating and undervaluing the importance of marketing in your business.

To learn more about how to go about your marketing, read about our 6-step marketing system - or download a copy of our free guide, 'How To Attract, Win, Keep & Grow Customers.'

Guide To Attract, Win, Keep And Grow Customers