Business Insights

Business Insights

Marketing vs Budget. Your Marketing Director needs to act like an accountant.


Tony Sousa

In our ‘Mad Men’ view of marketing, this is where the fun, ‘fluffy’ side of business happens. The crazy creative ideas, the ad campaigns with beautiful people, the perfect logo that is impossible to forget, the tagline that is on everyone’s lips – products flying off the shelves and people lining up for your services. But this is a fantasy. Really good marketers who really do make the products fly off the shelves and people queue for your services, don’t look or act like ‘Mad Men or Women’. They act more like boring accountants and business analysts. They look at a company’s financial statements before they start looking for ideas and models. They look at where the company is making money and losing it. The company’s business model – where is it working and where it is not. Good marketers know that their job – and the job of marketing – is to make money for a business. All of the ‘sexy’ stuff comes much later and even the job of the ‘sexy’ stuff is to make money.

By Tony Sousa, Regional Director

Show me the money.

Contrary to popular opinion, a truly effective marketing campaign doesn’t begin with a ‘big idea’. That comes later. Don’t get me wrong, the idea behind the campaign and how it is executed are vitally important, but the starting point of any marketing campaign must begin with a marketing strategy, which boils down to how this company is going to make more money. Marketing, when not truly understood and deployed properly to add revenue to the bottom line, is usually one of the first line items to be scrapped from a budget. Or marketing might have never been put into a company’s business plan at all. Or marketing can be a mad-dash afterthought, when there is a scramble for sales. All of this happens because marketing is misunderstood. Marketing has an identity crisis in the minds of business owners. Marketing is seen a cost-centre versus a revenue generator. It’s seen as the ‘soft’ side of the business. This view is inaccurate. Marketing that is founded on a bullet-proof sales strategy is there to make a profit. That is marketing’s job – to generate more revenue and drive down wasted costs in a business, since a business without a profit is a hobby. But the more popular belief is that marketing is about designing a fancy new logo, creating a catchy tagline, placing ads somewhere, putting some banners on websites that are relevant to your business, running a ½ price promotion, etc. When people think about marketing, those are usually the things that come to mind.

Proactive sales graphBeyond ads, balloons and promoters.

Beyond ads, balloons and promoters The end result of your marketing strategy – your marketing campaign – might take the form of any of these things and that’s fine. It doesn’t matter what the actual elements of the marketing campaign are, as long as each of those elements is doing its job, which is to generate more revenue and minimise losses for your company. If your ads are generating a profit, keep them. If the free balloons are attracting customers to your store, ditto. If the promoters are doing a good job at collecting data that can be used for future marketing campaigns, that’s great. The point is that every ‘marketing’ decision is actually an accounting decision.  


ConsumersThe end of marketing as we know it.

In his world-renowned book, Sergio Zyman successfully states his case that most marketers will never get the chance to rise through the ranks to become a CEO because they don’t understand profit versus loss. A company’s reason for ‘being’ is to make and maximise its profits. Only astute marketers understand that profit and loss must be baked-into every marketing decision. Sergio Zyman lands his argument by citing his famous ‘killing’ of one of the most popular Coke ads of all time. Everyone loved the ad, but loving the ad was not creating sales. The ad was not doing its job of selling more Coke, so it was pulled.


You may also like our article: What is Marketing ROI and why does it matter?

What business are you in? Marketing will tell you

What business are you in? Marketing will tell you.

This might seem like an odd question at first. Of course, you know what business you are in! For instance, if you make drills, you’re likely to say that you are in the business of making drills. However, as Harvard professor Theodore Levitt famously said “People don’t buy drills, they buy holes.” With that in mind, you’re actually in the hole-making business because holes are what people are actually buying from you. Maybe your company loves to make drills. That is your focus. But perhaps your company is so focused on making drills, that it is not paying attention to the fact that consumer tastes have moved on. Now people are demanding smaller drills, they want to buy smaller holes. Following trends is not what your business is paying attention to, so that opportunity for growth might be missed. Should your company design a smaller drill? Is it possible?
Is the cost of the investment really worth it? How big is the market for people looking to buy small holes?
What should you charge for your new smaller drill? Often, a pricing strategy isn’t even considered. A product is just put into the fray of the market to see what happens. Where are your sales coming from? Are your old, bigger drills still outselling the new, smaller ones? Only tracking sales will tell you. Marketers force companies to answer these questions.
A solid marketing strategy that’s measured by financial indicators can truly define which business you’re actually in. It will show you where you’re losing money, where there are gaps in the market and where you’ll find room for growth.
Your income statement will dictate the direction of your business. 

How to find a marketer who acts like an accountant.

Many small businesses don’t have the marketing skills that they need in-house or don’t have the budget or need to acquire a full-time marketing resource. It is of utmost importance to know How to measure marketing ROIOutsourcing is a good solution to get the marketing expertise you need.
There are 1000s of marketing companies out there that are more than willing to offer your company their services, so finding one is easy! However, finding the right one is not. If a ‘marketing’ company comes to you and says “We have a great marketing idea for your business – look at this new logo or new ad”, keep looking. Look for the marketing company that comes to you and says “Show me your numbers. Tell me who your best customers are. Tell me about who you are trying to reach, but can’t.” Find a marketing company that, first, really wants to understand your business so that they can understand what they need to do in order to maximise profit and minimise costs. After they truly understand all of the moving parts of your business and put a marketing strategy in place, then and only then, can the elements of the marketing campaign - the new logo, ad or whatever, can follow.

Find the marketer who acts like an accountant and you will have found the one.

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