There is no doubt that technology is changing fast. During an Uber ride I had, the driver, George, said to me, “I am getting a quote on replacing my roof. The company just needs the address and does not even send out a person. They use satellite images and AI to calculate the cost and quote.”
As I explained in the last two blogs (The Second Kick from a Mule – Part 1) (The Second Kick from a Mule – Part 2), AI and AEO are changing the ways we market our businesses. The bottom line was that AI is best used to support (not replace) human-driven content designed to connect with real people.
Yet there is a barrage of new information on how AI will revolutionize the way we promote our businesses, or will it?
What is Marketing?
Marketing is not an action, a tool, or a tactic; it's a system that requires multiple actions and usually multiple people to execute. That is the bane of most small businesses that don't have the knowledge, budgets, and time to do it all (or even key parts).
Marketing is the process of promoting and selling products or services. It involves understanding customer needs, creating value, and communicating effectively to attract and retain customers.
Marketing a small business involves a variety of activities, including research, advertising, content creation, social media, email, and sales strategies. The main goal is to connect businesses with their target audience, build brand awareness, and drive profitable growth through customer engagement.
I think the keyword above is ‘PROFITABLE,' and that means that all the costs and activities actually reap more cash than they spend. Spending $1000 to make $1000 is break-even and won't sustain any business for too long.
Very small businesses may only be able to afford help from one person. Bigger businesses ($1 million in revenue or more) have to choose between building an in-house team and outsourcing. Mid-sized businesses usually can afford a hybrid of in-house and agency teams that work in harmony.
But the rules still apply. If your marketing costs more than you make in sales, it can drain the profits needed to sustain and grow a business.
The Cost of Marketing
The average small to mid-sized business spends $75,000 on outsourced marketing per year (or between 7 & 8%) for every $1 million in revenue. That means $10 million in revenue will cost around $750,000. Having staff do it in-house would cost over $1,000,000, plus expenses.
The benefits of an in-house agency are that it is 100% dedicated to your business and culture. An agency will most likely be less responsive because it probably has multiple clients to answer to.
The Real Cost of Leadership
The cost of leadership is significant. The main purpose is to develop and execute a strategy. The main goal is to maintain customer satisfaction through communications while developing new business and strategic opportunities.
- CMO Salary: Averages – $175,000 Annually ($325,000 including benefits)
- Fractional CMO Salary: Average – $100,000 Annually (no benefits)
Every business has to decide whether having a full-time or part-time CMO makes sense for their needs and budgets.
The Real Cost of Outsourcing
Depending on the size of your company, you may use a mix of staff and freelancers, or an agency, to create and distribute the messages. The most basic agencies charge a monthly retainer of $5,000 to $15,000. They provide a basic suite of services that most businesses need: Web Development, Content Development, Social Media, Email, SEO, and more, including advertising and AEO.
Obviously, the more services you need and use, the more it will cost.
- Basic Agency: average retainer – $60,000 Annually (Just SEO or Social Media, etc.)
- Mid-sized Agency: average retainer – $180,000 Annually (Content Creation & Distribution)
Most businesses need more than what that covers. It could be 4 or 5 times the cost of the basic retainer ($300,000 to $900,000 annually).
If you had to employ a standard team, the costs could add up very quickly. Although people may wear multiple hats, the key people needed to execute a complete media strategy can range from 5 to 15 to manage your company's needs.
- Project Manager: $90,000 Annually
- Web Developer: $90,000 Annually
- Graphic Designer: $80,000 Annually
- Video Expert: $85,000 Annually
- Writer: $75,000 Annually
- Email Expert: $80,000 Annually
- Social Media Expert: $65,000 Annually
- Paid Media Expert (Advertising): $95,000 Annually
- Analytics & Data Specialist: $95,000 Annually
If you have to add that all up with a CMO and a staff of one each, it could cost over $1,000,000 per year. That does NOT include any software, advertising budget, or costs of office space, support services, and technology.
Real Results and Expectations
If that all sounds overwhelming and expensive, it's really just a framework for defining your goals, strategies, and outcomes. In B2b marketing (and some consumer), the goal is to maintain your customer base while increasing your brand's visibility to bring in new prospects.
All too often, I see companies that are more interested in developing new business than in maintaining current relationships.
Pareto’s Principle, also known as the 80/20 Rule, states that in many situations, roughly 80% of results come from 20% of causes or efforts. It highlights that a small number of actions or inputs often lead to the majority of outcomes. In marketing, I believe that content creation and distribution are the activities that account for 80% of the results.
The key is that the strategy for retaining and enhancing current customers is often (and needs to be) different than the one to attract prospects.
Your in-house or fractional CMO must have a clear strategy and plan for both, and your team must have the focus and bandwidth to execute them without squeezing two strategies into every piece of content you create and distribute.
Closing Thought
Moving forward, you should explore current trends, but don't neglect traditional methodologies. In the end, you are trying to stay top of mind and incite people to take action. Knowing where they are, what they engage with, and consistently measuring costs versus results, gives you the best opportunity to build profits.
The end of the year is a great time to reflect on what worked and what didn't in the past year, and how your marketing could change and evolve with current trends in technology, along with your evolving client and prospect base in the coming year.
Reach out if you would like to chat about how just-in-time, hybrid marketing may be a good mix to implement your new year's strategies and goals.
If you have questions or would like to discuss how we can help you achieve more successful marketing, CONTACT US (Click Here)
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Comment below and share your thoughts, ideas, or questions about business-to-business sales and marketing today! Do you have a sales or marketing communications strategy that works for you? What tips or techniques can you share that work for you and your business?
To learn more about this and other topics on B2b Sales & Marketing, visit our podcast website at The Bacon Podcast.
