Marketing: Not a Cost Center, But the Gasoline in Your Revenue Engine

Let's talk marketing. I know what you might be thinking: "Of course, you're saying marketing is essential; you're in marketing!" And you'd have a point. It may seem self-serving for someone in my position to preach the importance of marketing. But hear me out. This isn't just about me drumming up business (though, if you need help with your marketing, you know where to find me). This is about the fundamental principles of business growth, backed by data and experience, not just marketing fluff. As Peter Drucker famously said, “The purpose of business is to create a customer; the business enterprise has two—and only two—basic functions: marketing and innovation.”

The Unsung Hero of Business: Why Marketing Matters

Think about it. You could have the most amazing product or service in the world. But, if nobody knows about it, it will sit there, unloved and unsold. That’s where marketing comes in. We’re the storytellers, the connection-makers who get your message out there and make people say, “Wow, we need that!” But what happens when you don't tell your story? That’s what we’re going to explore.

Beyond Tactics: The Strategic Power of Marketing

Good marketing isn’t about disparate tactics. It’s about strategy, creativity, and really understanding your audience. It’s about knowing what makes them tick, what problems they’re trying to solve, and how your business can be the answer. But without marketing, you’re simply not going to grow any faster than the rest of your market.

The Price of Silence: Negative Effects of Neglecting Marketing

So, what are the harmful effects of neglecting marketing? Let’s break it down:

• Anonymity: The Best Kept Secret: First and foremost, you become invisible. Potential customers can’t buy from you if they don’t know you exist. You’re essentially a ghost in the marketplace, easily overlooked and forgotten. In a crowded market, this is a death sentence.
• Missed Opportunities: Losing the Race: Every day you’re not marketing is a day you miss out on potential customers. Your competitors are out there, actively grabbing attention and building relationships. While you’re sitting on the sidelines, they’re winning over your target audience.
• Stagnant Growth: The Plateau Effect: Without marketing, your business is likely to stagnate. You might maintain a small, loyal customer base but struggle to expand and reach new markets. Growth requires consistent effort and a strategic approach to reaching new customers, and that’s exactly what marketing provides.
• Weakened Brand: The Undefined Identity: Marketing is essential for building a strong brand. Without it, your brand becomes diluted and undefined. People won’t know what you stand for, what makes you different, or why they should choose you over the competition. A weak brand makes competing incredibly difficult and often leads to price wars and shrinking margins.
• Lost Customer Loyalty: Drifting Away: Marketing isn’t just about acquiring new customers; it’s also about nurturing existing relationships and fostering loyalty. Without consistent communication and engagement, customers can easily drift away and choose a competitor who makes them feel valued.
• Decreased Revenue: The Domino Effect: Ultimately, the lack of marketing translates to decreased revenue. Fewer leads, fewer conversions, and a weaker brand all contribute to declining sales. It’s a vicious cycle: less marketing leads to less revenue, which then makes it even harder to invest in marketing.‍
• Business Failure: The Ultimate Risk: In the worst-case scenario, neglecting marketing can lead to business failure. Businesses can’t survive without a strong marketing strategy in today's competitive landscape. It’s not a luxury; it’s a necessity.

From Houston to the World: Marketing Lessons from Success and Failure

Bankruptcy might sound dramatic, but there are many examples of companies that simply went out of business because they did not communicate with their markets. Here is an example close to home. Here in Houston, there was a local jewelry store named IW Marks. They advertised on local TV and were the most famous jewelry store in town. 

Well, as the years went by, they pulled their ads from television and other media. At the same time, the city was growing rapidly, and millions of new people moved here. The jewelry market became more competitive with new entrants entering the market. As new Houstonians bought jewelry, they bought from the brands they knew, big chains, and online retailers. 

Then in 2023, IW Marks closed their doors. Think about that story compared to another Houston leader, Gallery Furniture. During that same period of growth, Jim McIngvale (Mattress Mack) kept advertising and kept his brand relevant despite the headwinds of tough new market entrants and lots of newcomers in the Houston market. He has grown his business over the years and become a local celebrity. 

Now, many things contribute to the viability of a business, but imagine if the two stores would have flipped their strategies. What if Mattress Mac had stopped advertising? Would Rooms to Go or any other large competitors have replaced him? What if IW Marks had stayed relevant and rode the massive population growth that Houston experienced in the same timeframe?

It certainly wouldn’t have hurt. Check out both company’s cheesy ads from the 1980s. 

• IW Marks‍
• Gallery Furniture

The Numbers Don't Lie: Marketing ROI

The truth is that marketing is an investment. You’re investing in your future, growth, and bottom line. It’s not just about spending money; it’s about building a sustainable business that can thrive in the long term. But don’t take my word for it. Here are some interesting facts to consider:

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Of course, these are averages, and actual results will vary based on factors like industry, company size, and marketing strategies used. Plus, marketing is a long-term game that requires consistent effort and investment to see significant results. Your marketing team should be tracking key metrics that are aligned with your business's goals, understanding what’s working, and optimizing their campaigns.

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