By Norton E. Warner

Advertising: Investment or Expense?

If a prospective customer enters your business and is greeted like royalty and made to feel important, and if she leaves having been treated as she feels she deserves, you are on your way to creating a lifelong customer and a positive center of influence. Clearly, the advertising that brought her to you was an investment.

If, on the other hand, she was attracted by your advertising but is met with indifference or even hostility, you’ve lost your investment in potential long term profits. If she is treated as if she is imposing on an employee who’s stocking shelves or having a personal conversation—and leaves feeling scorned or unappreciated—you’ve lost a potential lifelong customer who then becomes a negative center of influence. Your advertising becomes an expense and you have nothing to show for it.

An investment, by definition, is an expenditure made in the expectation that it will produce future income. To be classified as an investment, internal marketing that creates lifelong customer relationships resulting in future income must support advertising. Advertising, as an investment, attracts customers who will stay attracted to your enterprise, become positive centers of influence, and bring you additional customers. Advertising is a profitable investment when one new customer experiences satisfaction and produces additional business for your store or practice.
If through advertising you attract a consumer who becomes a loyal customer, and that customer’s enthusiasm about your enterprise brings you five additional loyal customers, then your advertising has created not just one but six new customers. But if you expect advertising to produce every new customer; to keep churning out new customers because few are retained; and to compensate for the poor service that sabotages future revenue, referrals, and centers of influence, then your expectations will not be met and advertising will always be a burdensome expense.

Tags: marketing, advertising, small business, investment, expense