5 Questions to Consider Before Making a Marketing Investment

Business owners tend to have diverging palettes when it comes to marketing. 

After all, a positive or negative past experience can heavily influence an opinion on marketing’s effectiveness. 

Of course, the truth is that not all marketing is created equal. It’s nearly impossible to advise on the worthiness of a marketing investment without properly vetting the agency (or freelancer / employee) providing the work. 

So, for the sake of this article, we will assume that you have a proven, highly-skilled team on your hands with a thoughtful strategy for future growth. 

The question you may be asking next is: How do I determine whether this investment is suitable for my company?

This is a perfectly logical question to ask, and we deal with it all the time at Fisheye. 

Here are 5 questions we think prospective clients should consider before making a marketing investment.

1. What Is My Objective?

A common tendency for business owners is to “do some marketing” and wait for the top line to grow. 

However, your vision for your marketing must come with a strong objective.

Examples of objectives may include: 

• More client leads 

• More qualified employment applications

• Awareness around a new product / service

Without a clear objective for your marketing, there is a good chance that those dollars will burn up as a consequence of a poor strategy.

Define exactly what your end goal is and why you believe that end goal will move you toward success.

2. Am I Viewing This Proposal as an Investment or an Expense?

If you’re like many operators, you view marketing as an expense item on your P&L.

With bad marketing, this is probably the case. 

With effective marketing, however, the increased revenues generated through impactful marketing far exceed its purchase price. Aka — a sound investment.

(Have we said anything earth-shattering yet?)

The proper mindset is not to view marketing as an expense. In this case, the goal primarily becomes finding the lowest rational price for the services or placement. 

Rather, we contend that marketing must be viewed as an investment. 

Think of it this way: if you determined an opportunity would provide a significant annualized return with a moderate amount of risk, would you prefer to offer as little as possible? More likely than not, you would prefer to fund as much into the deal as you reasonably could afford. 

The inverse is also true. If you doubted an opportunity’s ability to provide a substantial return given the risk, would you prefer to put any money towards the deal?

Viewing marketing as an investment immediately forces you to become more prudent with your dollars and creates an environment of optimism around the initiative.

3. Am I Willing to Be Consistent?

This might be the most important question to ask yourself. 

Just like in fitness, healthy marketing is not achieved through short-term gimmicks and tactics. The key to your business’s long-term success is by building a trustworthy brand through consistency.

Picture this: you have a wedding to prepare for and you’ve procrastinated. You need to get in shape and you only have three weeks. Anything you do at that point will probably be unhealthy and yield less than desirable results.

You’d be better off making a lifestyle change and committing to long-term change. Only through consistent behavioral change will you see real results.

As an investor in marketing, you need to commit to the long game. No lasting success is achieved overnight.  

Consistency is key.

4. Do the Assumptions and Estimations Presented Make Sense?

Most business owners understand their need for marketing of some sort. 

Knowing what’s realistic in the ever-changing world of marketing is a different animal.

Many agencies will fire a number of assumptions and return estimations at a prospective client. Some of these assumptions will be totally valid, but it is your job as the investor to determine their ultimate validity. 

Is it reasonable to assume a conversion rate of 2% for this specific campaign? Have they proven this rate in a similar, recent campaign? Is this appropriate considering my industry? 

Many of these estimations may be difficult to analyze for a non-marketing expert, which is why we suggest consulting with other advisors, mentors, and the like who have experience in this field.

Once you trust the estimations, be sure to run your own numbers. Given a 2% conversion rate, how much can I expect to see in increased sales? Is this a satisfactory return, given the amount of risk I am taking on?

Now, one last thing to remember before moving on: Not every aspect of marketing requires an emphasis on ROI. 

Did you measure the ROI of the new signage you put up for your storefront? 

How about the coffee you put out for customers?

Have you measured the ROI on having a clean floor in your main lobby?

In a similar way, many aspects of marketing are difficult to place a monetary value on. But as business owners, we know that a great customer experience leads to more happy customers. 

Value in marketing is layered. More often than not, the value is in long-term gains from shifting the perception of your business.  

5. What Does Your Gut Say About the Partnership?

Our final question is a survey of your gut feeling.

Perhaps the most important quality of a prospective agency is integrity. 

Will they complete the work they promised? Will they complete it on-time? Do I trust and understand their reporting process? Are they honest about hiccups and roadblocks in the execution?

How do they sound in the meeting? How do they sound over the phone? 

Do they really understand me and my business?

Trust is earned. Do not rush into a potential partnership before examining your intuition.

It’s hard to do a good deal with bad people. 

Ultimately, a wise investment in marketing comes down to your own due diligence. 

These are simply some of the questions we encourage prospective clients to consider before making the investment. 

No investment is guaranteed, and you can never be certain about a given return. It may underperform and require pivoting. It may exceed all of your expectations. 

You can hit it big without making the investment.