Consulting firm marketing: An expense or investment?
By David Smith
The “Marketing: Expense or Investment” question is direct. It gets to the heart of how your tech consulting firm views marketing.
The answer, on the other hand, is not so straightforward.
Some tech consulting firms view marketing as a necessary evil. In this camp marketing is an expense, a necessary cost, a check box.
The other camp views marketing differently. These tech consulting firms see marketing as an investment. They view marketing as a means to establish authority in their field, attract the clients that align to their strengths, and a means to growing their company.
Before we go further let’s define a few things.
Marketing can be defined as “getting someone who has a need, to know, like, trust, contact, and refer you.”
Wikipedia defines investment as “the allocation money in the expectation of some benefit in the future.” Expenses are an outflow of money to another person or group to pay for an item or service.
I define Marketing Investment as “allocating money, time and effort to achieve growth or produce a marketing asset.”
In this thinking “growth” is profit, revenue, customers, prospects, leads, contacts, and awareness. Marketing assets are elements that can be reused in your marketing system. Assets would include content, design, brand, or other elements that once created, can be used over and over.
The Expense Camp
For these firms, marketing is like overhead. It’s rent, utilities, and equipment. That outlook drives them to do no marketing, or if they do, it’s often a waste of money.
There is no expectation of positive results or increases in revenue or customers. Since many of these firms drive most of their business from existing customers and word of mouth, marketing is simply an expense.
They may have started their firm on a few referrals, spent nothing on marketing, and want to continue the pattern. Word of mouth and owner-led conversion of prospects to customers is the default marketing system for many small businesses.
Above this staunch no-marketing level of marketing is an expense consultancy, is your bare minimum level.
They will at least have the basics: a business brochure website, minimum content, minimal opportunities for engagement via email or social media, and little or no focus on building authority.
To these firms, marketing is a cost too — a necessary evil that isn’t directly related to the business they are doing.
There is nothing wrong with this business and marketing model. But you have to accept the limitations.
The Investment Camp
These firms want to grow and scale. They recognize the opportunities of marketing and weigh the risks of the investment.
They may calculate the customer lifetime value or the impact of ideal customers (It’s 16x the value of a regular customer!) and determine there is the opportunity to build awareness and establishing authority and market leadership.
They desire to expand beyond word of mouth marketing and serve more; they view their business as adding value to their customer organizations.
Marketing investment for these tech consulting firms revolves around a combination of:
- Brand awareness
- Lead generation
- Content development
- Marketing asset development
- Customer experience
- Onboarding processes
- Thought leadership
- Referral campaigns
You shouldn’t view the list and assume that it’s an all or nothing game. Each consulting firm will need to determine the right mix unique for them.
If your firm wants to grow the customer list quickly, your mix might include PPC for lead generation and concentrated marketing asset development (i.e., eBooks, whitepapers, customer success stories, etc.
If your firm wants to increase its number of referrals per customer, your mix might include onboarding process improvements and referral campaigns.
Whether you install NetSuite, implement Salesforce, optimize business processes, configure cybersecurity, or provide enterprise integration and architecture consulting, your firm has to determine how you view marketing.
Are you spending or investing?
If you are investing, we’d love to help you figure out the right combination of areas to invest. We help you answer that question by concentrating on strategy first and prioritizing the areas of marketing that will have the most significant impact: now and in the future.
We would love to hear from you!
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About Valens Point
We help technology services organizations grow by putting into action a marketing system containing the right balance of strategy, technology, process, and expertise that will get results.