Expense or Investment?
Ask any accountant how to classify sales and marketing, and he’ll rightly point you that in their view, it would be an expense.
True enough, as you’ll more likely than not have to write a cheque or approve payment for such activities.
For entrepreneurs on the other hand, sales and marketing is an investment in our future. From our point of view, our job is not to buy a product, put it on the shelf and sell it. Our job is to buy customers – to bring in new business. So really, the profitable investment we make on sales and marketing, is the most important investment that we make.
If you were to spend $1,000 on an advertisement that gets you 10 customers, then your cost to buy each customer is $100. If each customer were to give you a net profit of $150 per purchase, would you be happy with that? Absolutely! How often would you do that? All day, everyday!
And that is why marketing is an investment; we’re investing money in buying customers who will have a lifetime in purchasing from us. So even though our accountants will tell us that it’s an expense, realize that it is the world’s best investment to make sure your business is continually growing. How you can invest to buy a new customer who will keep coming back and buying from you long-term.
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