Time Value of Marketing
For centuries people have understood the time value of money. The basic concept is if I invest a dollar today that same dollar will grow based on rate of return from the interest. This principle holds true and has made a lot of people rich. But can this same principle be applied outside the realm of finance? Specifically, is there a time value of marketing that if understood can dramatically improve your small business marketing?
What is the Time Value of Marketing?
It’s fairly easy to understand the time value of money because everything is measured in currency. Whether it is dollars, euros, gold, or bit coin, the measurement is always the same. Whatever unit I start with, my goal is to increase that same unit. But marketing isn’t units. Marketing is an idea or process used to increase sales in a business. Thus, the first step in understanding the time value of marketing is to convert marketing into a fixed unit of measurement. Since all sales are a function of marketing, meaning that anything done in a business to increase sales becomes part of my marketing, the best unit to use would be sales.
Capitalizing on Sales Over Time
Often times, small businesses ignore the impact time can have on a business. Business failure rate decreases over time. Every year a small business stays in business increases their chances of being a more successful business. Of course there are many factors that contribute to this, but remember this. In marketing it is easier and cheaper to sell to an existing customer then it is to get a new customer. Just like in finance, a customer “invested” in your business today will continue to pay dividends year over year.
Getting Started with Investing in Your Marketing
If there is a significant benefit in the time or duration you can have a customer, it’s best to get started today. This means that you should put most of your focus, effort, and energy into maximizing the sales from your existing customers. These are people who have already bought from you and most likely already like your products and services. The best way to invest in your marketing is to invest in your customers. Make them happy. Listen to their needs. Develop new products and services to fit those needs. And, probably the easiest and most effect investment in your marketing is to make sure your customers remember your business. Take time to remind them. If they made a purchase and were happy with their purchase, follow up and see if there is anything else you can offer them. Even if they made a purchase and weren’t happy you should still try and talk to your customers. Even a mistake can turn into a great investment in your marketing.
The Steps to the Time Value of Marketing
Here are three simple steps to make sure you are maximizing your time value of marketing. First, start with your existing sales in your business. Even new businesses should have a small revenue stream flowing into their business. Make this your first priority. Don’t go after new markets or try and advertise to new clients until you have met the needs of your existing clients – the ones who are already paying. The next step is to guard your customers. Protect them by continually meeting their needs. Develop marketing strategies to gain additional sales from existing clients. Think of news ways to sell to the same customers rather than trying to always go after new customers. Finally, at some point you will want to get new customers. Focusing too much on only existing customers and never replenishing your revenue streams is a poor marketing strategy. However, when you do go after new customers, use the techniques and strategies you acquired from your existing customer to make it easier to attract new customers. With the time value of money, the investment grows because of compounding the interest. Essentially you are making your money work for you. The same can apply to marketing. Don’t start anew with a fresh marketing strategy to a new target market. Take what you know works and compound it to work for you and your marketing.