Why is it important to invest in marketing?

German companies invest an average of 6% of their annual turnover in various marketing measures. Of course, this average varies from sector to sector and reaches around 20% for start-ups, for example. However, marketing is not a cost item, but an investment in the future of the company. Unfortunately, many companies do not have a detailed marketing strategy or a fixed marketing budget. However, investing in marketing should not be a gamble, but should be professionally planned to ensure that it is a worthwhile investment.

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Ok, but why is it important to invest in marketing? Marketing brings a variety of benefits that are vital to businesses. These include communication with customers, a stronger brand position, increased profitability and the opportunity for long-term growth.

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To properly invest in marketing, all the benefits of marketing need to be understood. Based on this, a marketing strategy and marketing plans can then be created. The budget required for this is the investment in marketing that is needed to achieve the defined goals. In this document, we have summarized the most important reasons why every company should invest in marketing. So read on to understand what your investment in properly implemented marketing can bring you.

Reasons to invest in marketing

There are many reasons to invest in marketing. The ultimate goal is, of course, to increase the company's profits. However, how this goal can be achieved is not set in stone. There are a variety of ways in which a company can benefit from marketing. It is important to look specifically at the different benefits of marketing in order to define the right objectives for the marketing strategy and thus make the most profitable use of the investment. The following benefits can be gained by investing in marketing.

Specific requests

Targeted marketing offers the advantage that companies are specifically looking for your services/products. Investing in targeted marketing has a direct impact on the number of orders or orders/purchases of products. Especially in our digital world, such marketing plays a major role. By investing in targeted marketing, so-called "hot leads" can be generated. These are individuals or companies who are looking for your product or service or have a problem that you can solve.

Increase range

One of the biggest advantages of marketing is the increased visibility of your company.

By investing in marketing measures, more customers can be reached and informed about your specific products, services or offers. And the more customers you reach, the more likely you are to receive orders or sell products.

Increase in profitability

Investing in marketing allows your company to support and further expand the most profitable departments / product ranges. This generates more free cash flow, which can be reinvested in the growth of your business. Plus, increased profits mean happy business owners and shareholders.

Gain a better brand position

Marketing also offers the opportunity to invest in your own marketing position. A strong brand position always ensures more inquiries from service providers and a higher trust factor for products. In addition, a strong brand position makes it possible to increase prices and thus increase sales. Depending on the type of company and the focus of the marketing strategy, a product can be positioned as an everyday product or as a premium product. In this way, strategic investments in the marketing position can be used to attack the target market that is most relevant to the company.

Increased customer loyalty

Marketing measures and investments in your own brand increase customer loyalty. Through a strong brand image and the right investments in marketing, the customer builds up an emotional connection to the company. This influences their choice when repurchasing items and can ensure stronger sales for companies in the long term. Ideally, customers will no longer even consider a competing product.

Security in times of crisis

Those who have been able to build up different customer bases with the help of marketing are better equipped to deal with crises. There are always unforeseeable changes that can put pressure on a company. These include

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• Increased production costs

• Less consumer spending

• Skills shortage

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Companies can reduce such risks by investing in marketing. If, for example, production costs increase, it is more likely to be able to pass these on to the customer if you do not compete with the competition on price. If you already have high-margin customers through investments in marketing, these costs can either be absorbed by the company or passed on to the stronger customers.

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If consumer spending is reduced in a crisis, strong brands have a greater chance of continuing to be favored by customers. Costs are more likely to be saved on "unpopular" products or services.

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Discover more possibilities

Investments in marketing are always a form of communication with the customer. By investing in social media marketing, for example, feedback from customers can be obtained easily and efficiently. This can open up potential opportunities for further product developments or identify new target markets. In addition, networking with other experts from your own industry enables the exchange of ideas and thus possible improvements for your own company.

Continuous improvements

Investing in marketing, as opposed to simply spending on advertising media, also means evaluating the results of marketing campaigns. Nowadays, a variety of advertising tools make it possible to check and precisely define the impact of the marketing campaign. This makes it possible to create a cost-benefit analysis and calculate the return on investment for marketing.

Online marketing enables the direct tracking of customers who have become aware of the company through marketing measures. CRM systems allow the tracking of customer inquiries in service companies. All of these solutions allow companies to regularly monitor their investments in marketing and make further steps more efficient.

Investing in growth

Investing in the right marketing measures also means investing in the growth of your own company. Marketing supports precisely those areas of your company that generate the customer inquiries needed to continue to support growth. Companies or business units that still have room for growth are usually dependent on precisely targeted marketing in order to achieve the desired growth targets.

Finding the right customers

Not every inquiry is the same. Investing in marketing helps to target the right customers and therefore receive relevant inquiries for services or product ranges. For service providers, this can mean only targeting customers in a certain sales size range. For product manufacturing companies, this opens up the possibility of developing different product ranges for different customer segments.

Attracting new talent

Investment in marketing does not necessarily have to appeal to potential customers. Investing in marketing can also help to attract new talent to the company. After all, any company is only as good as the people who work for its success on a daily basis. Investing in marketing to support growth or further sales can only bear fruit if there are enough qualified staff in the company. Regular investment in marketing for talent acquisition can therefore play a decisive role in the long-term success of the company.

Higher conversion of existing requests

Those who invest in marketing often create a clear company image. Investing in the marketing & sales skills of your employees then increases the conversion rate of existing inquiries. Investing in marketing not only helps to generate new inquiries, but also supports your team in converting customer inquiries into orders.

Personnel development and succession planning

Stress is a common factor that makes the development of staff and the training of new employees more inefficient. Experience shows that companies that have invested in marketing achieve a higher sense of satisfaction and security among employees. This is understandable, because when your own workplace is known, it creates a sense of pride. If the order situation is also right, this provides security. Investments in marketing can therefore indirectly ensure a positive working atmosphere and thus help with personnel development and succession planning.

Investment in SEO & SEM

If you invest in search engine optimization or search engine marketing, you can be found quickly by potential customers for certain search terms. Such investments can mean a steady stream of leads in the medium to long term. Investing in search engine optimization can maintain this stream in the long term without having to pay for further cost-intensive advertising measures. Investing in search engine marketing allows for precise budgeting. Here, the budget can be adjusted almost simultaneously if more leads are needed or if there are already enough inquiries.

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So there is no single answer as to why you should invest in marketing. There are numerous benefits that marketing can bring to your company and these benefits must be precisely aligned with the company's goals. It is therefore not only important to invest in marketing, but to invest in marketing properly!

Invest in marketing the right way

As many opportunities as marketing offers, there are opportunities to invest in marketing. Since every company has limited resources at its disposal, it is often not possible to realize all the benefits of marketing at the same time. Investments must be carefully considered and targeted. To achieve this, two basic steps must be taken:

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1. Develop a marketing strategy

2. Design marketing plan / plans

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Anyone who meets these requirements will understand which advertising measures can be taken to achieve the desired goals. Investments can then be allocated to them.

Develop a marketing strategy

A marketing strategy includes all the measures that a company must take to achieve its marketing goals. But if you want to achieve the desired goal, you must first analyze a variety of factors. Based on the data and experience gained, the right decisions can be made. These factors include

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• Define the market and establish framework conditions

• Define target groups and recognize niches

• Select marketing channels

• Pricing

• Determine the type and tone of communication for all channels

• Design and objectives of brand image

• Define customer journey

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The marketing strategy thus describes the overarching goals that are to be achieved later through marketing and advertising measures. A marketing strategy defines the medium to long-term orientation of the company and describes why various resources and budgets are required for marketing. Objectives in a marketing strategy are the basic building block for the advertising activities to be planned. One or more marketing plans can then be drawn up based on these objectives.

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Investing in the correct development of a marketing strategy is important in order to be able to use subsequent investments in advertising materials correctly. No matter where the company is located, a marketing strategy provides support:

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1. Arouse customer interest

2. Turning potential buyers into customers

3. Increase customer loyalty

4. Differentiate from competitors and communicate strengths

5. To support further corporate goals

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A good marketing strategy not only serves to communicate externally, but also supports internal communication and brand building across departments.

Without defining a marketing strategy, efforts from different departments may pursue different goals or be directed in different directions. Such misguided marketing activities, defined without a unified goal, cost time, money and resources.

Design a marketing plan

A marketing plan describes the specific measures to be taken by the marketing department in a defined period of time in order to achieve the objectives of the strategy.

A marketing strategy encompasses the entire company and any specific departments that support the company's marketing. These can include departments such as

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• Distribution

• Online marketing

• Branding

• Public Relations

• Inbound Marketing

• Outbound Marketing

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Based on the marketing plan, budgets can be set for different marketing and advertising measures. In this way, investments can be used correctly and the success of each investment can be viewed and monitored individually.

Building a marketing strategy and the marketing plans based on it is the difference between incurring "marketing costs" and "investing in marketing".

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Conclusion

Virtually all companies spend money on marketing. The basic idea is also correct. Because only those who are noticed by customers have the opportunity to sell their products or services. As marketing offers many other advantages and opportunities, investing in marketing should be an integral part of every company's strategy.

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The difference between " marketing costs" and " investments in marketing" lies in the well-researched marketing strategy and the marketing plans based on it. Investments in marketing allow the company to track the results of individual investments. Large companies have their own marketing departments for this purpose, which in turn are divided into smaller departments to handle the multitude of tasks involved in efficient marketing. If you want to invest properly in marketing, you need a lot of expertise in the various areas of market research and marketing. Such departments naturally generate high overheads. The Munich-based company MORE offers an alternative. MORE is not an advertising agency, but an external marketing department for your company. With a limited number of clients, MORE joins your company as an external marketing department and supports the achievement of your business goals through proper marketing. This enables the regular evaluation of your marketing investment and therefore the correct deployment of resources to maximize return on investment. This makes MORE the best marketing department you have ever had.

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