SaaS Marketing Blog

Why You Should Want To Spend More Money on Marketing

10th May 2012

If you own any business, your goal is to make a profit. It’s the same whether you’re a sole trader or an international corporation. The key to success is to take home more than you’ve spent running your company.

Marketing can maximise your business profit. It can help in small doses, but if you’re able to spend more on marketing you can increase it even further. Take two businesses, for example:

Business A has an annual turnover of £100k. Each year, their costs total £50k, and they make a £50k profit. The people at Business A spend their year trying to reduce their costs, to increase their profits. They’ll never make more than £100k in profit, even if they eliminated all business costs.

Business B has an annual turnover of £1m. Their business costs total £500k a year. This money is spent on marketing, and they make a £500k profit. They’ve spent much more on marketing their business, but in return they’ve received ten times the profit that Business A has made.

Marketing can help you scale up your business. The initial costs can bring a greater return on investment. Think of it like selling cookies. You can buy 100 cookies costing 10p each, and you’ll have spent £10 on cookies. Sell them on for 50p each, and you’ll have a turnover of £50 and a profit of £40. Of course, if you’d invested more initially, purchasing 1000 cookies for £100, you could sell them for the same price and have a turnover of £500 and a profit of £400. You’ve spent ten times more initially, but you’ve made a profit that’s ten times bigger as well.

Marketing your business will help you get attention, will save you time and will tell people what your business is about. Look at marketing as an investment, rather than a cost…the more you spend, the greater the return you will get.

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