Apologies if this question offends anyone, but in nearly 6 years of working with small and medium sized businesses, I could probably count on one hand the number of clients who really know what they actually spend on marketing.
It’s not uncommon to find a business owner who actually spends double what they think they spend on marketing, and of course this can profoundly change their view on whether they are getting good results and good value for their investment.
Sometimes it’s down to a definition issue – what do you count as marketing? I tend to take a fairly simplistic approach and when you get to the ‘grey areas’ include anything which is mainly aimed at generating future business.
Things that can easily be overlooked are the indirect costs e.g. the design of a flyer rather than just the print cost, and most importantly the cost of people’s time. For instance, if you go to networking meetings, it’s easy to count the cost of the meeting fee, but do you also include the flyers and business cards given out, the travelling cost to get to the meeting and the cost of your time? If you think what you could be charging for your time or what else you could be achieving with that time, you’ll usually find that the meeting fee is almost an irrelevance.
The other main reason that business owners don’t really know what they spend on marketing is that they often don’t have a marketing plan with a budget that they can track against. For too many businesses, marketing is a reactive exercise, undertaken to deal with a shortfall in sales or a competitor’s activity rather than a series of well-planned and costed actions designed to generate a profitable return. As with so many things in life, when you buy something in a rush you tend not to get the best deal!
Chris