Great marketers enjoy talking about Return on Investment. Yesterday, I attended a meeting with a real estate company who had some challenges with their web strategy. Their brochure site wasn’t driving too many leads and they were spending quite a bit of money on a number of external programs to drive leads into their sales funnel. The problem that we identified was that they were paying for all of those companies to compete with them online.
Driving backwards from their lead conversion rate and revenue per close, we helped visualize what kind of impact an overall online marketing strategy could do to drive the cost per lead down, increase the number of leads, and reduce their dependency on third-parties. It’s not an overnight process – it requires momentum and a long-term strategy to make the transition. That seems to often be a challenge with companies addicted to third-party lead sources.
They were very happy with the meeting and we’ll soon follow up on next steps. As I was speaking to a colleage about it, though, I couldn’t help but think that all this talk of investment, return on investment, marketing expenditures, advertising costs… it all draws on a single strategy. In order to develop a marketing budget, you have to increase profits for a company.
Later, I was reading in a social conversation about how companies only care about profits. I don’t agree at all. 99% of the companies we have worked with – from large public companies to the smallest startups – measured profit but it was rarely their measure of success. In fact, customer acquisition, customer retention, employee turnover, authority, trust, and market share have always been highest on the radar as we’ve talked about assisting companies. I’ve honestly never had a company approach me and say that we need to increase profits – how can you help?
That said, it’s upsetting that the “P” word has become one that is whispered rather than shouted from the loudest mountain. Profit is not synonymous with greed. Profits are what enable companies to hire, enable companies to grow, enable companies to invest in research and development, and – ultimately – profits are what corporations are taxed on. In other words, the higher the profit margin for a company, the better it is for our overall economy. Higher profits generate higher tax revenues to support our poorest citizens. Higher profits enable companies like mine to grow and enable opportunity for advancement and employment for those looking for a job or seeking to advance.
Greed is when companies horde wealth at the expense of their employees, customers, and society. The highly profitable companies I know pay their employees well, continue to improve the experience for their customers, and invest and donate much to society. And they do it through voluntary accumulation of wealth, not taking it.
I don’t think we should be quiet about marketing and its impact on profit. I think we should celebrate profit… the bigger, the better. And we shouldn’t be seeking ways to minimize it through taxes and regulation. It’s counterintuitive.
Here’s to increasing your profits and your profit margin!