Is Marketing an Expense or an Investment?
Since most professional services firm accounting systems treat
all strategic costs as expenses, it can be difficult to make
the shift to thinking of marketing as an investment. Expenses
are costs to be reduced where possible. Yet marketing is an
investment, and like any well managed investment can increase
firm value and partner income.
Thinking of marketing dollars as strategic costs, rather than
expense costs, it is easier for firm management to set the
ground rules for how to invest those dollars to get the best
return. Like other strategic costs, it is a long term investment.
Firms that fight the urge to reduce their marketing investment
in the bad times and increase it in the good times will have
a better payoff over the years than those with a more short-term
view.
How Much Should We Invest in Marketing?
Various studies by the AICPA and MAP indicate that most accounting
firms spend between one and three per cent of their firm revenue
on out-of-pocket marketing costs. This average does not typically
include the value of staff time spent on marketing related
activities. Other surveys have shown that firms spend 2-5%.
These typically include all marketing related costs.
Four Building Blocks of Marketing Priority
Four audience categories should be included in marketing planning:
clients, referral sources, target markets and the general business
community. The way you market to each group is different because
the outcome you want from each group is different.
§ Clients. Immediate objectives for marketing to this
group--satisfaction and continuity, additional or add-on services,
and referrals. The greatest potential for short-term payback
comes from existing clients.
§ Referral Sources. Longer-term, developmental objectives
for marketing to this group--making more and even better referral
contacts, more or improved interactions with these sources, and
ultimately, more referrals.
§ Target Markets. Long term objectives--to identify and
prioritize the markets where you can make the most impact, and
to focus the marketing effort on those activities that will result
in the greatest potential payback in each market segment. A substantial
part of your marketing budget will be spent on this category.
§ General Business Community. Since you are unlikely to
gain new business quickly from this group, goals are more general
and long-term: firm exposure, reputation building, and personal
interaction.
While the marketing tactics used to reach each group helps
to build awareness, build the firm's reputation and get face
to face contact, it's still the personal partner or professional
staff's involvement that gets the business.
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