Where should cash go first? Marketing or Operations? If we were to follow the model of our human bodies, it would go to Marketing first. In our business body, our Respiratory System represents the Marketing Function. Operations, or our Digestive System, would be second.
No Customer, No Business
Operations folks and Marketing folks are always battling for funding. They always think their department is most important. How can you blame them? There are good arguments on both sides. From a Marketing standpoint (I’m including Sales here for simplicity), you can’t do business without getting customers. From an Operations standpoint, you can’t serve customers or deliver your products without an operation to do so. So if you get the customers but you can’t serve them, then you lose them and you’re back to square one. However, without customers you wouldn’t even need Operations.
The simple answer is, Marketing takes priority.
Marketing Trumps Operations
Taking the analogy of the human body where the Respiratory System is Marketing and the Digestive System is Operations, you have to understand that the Cardiovascular System is Finance. In a past article, I equated Blood to Cash. In our human body, the heart (Finance Dept.) pumps blood (cash) to our lungs first (Marketing/Sales Dept.). This process allows blood to get oxygen (clients) to deliver to the rest of the body. Then the oxygenated blood goes back through the heart to be pumped to the rest of the body. Oxygen helps the rest of our body function well. Without it, we die! See related article.
When our business body doesn’t have oxygen (clients), our business dies! It’s even more important than blood (cash). “Blood is the means to provide oxygen, but it’s the oxygen that keeps us alive.” (Source: Cash is King, but Oxygen Trumps It!) You can have a great product but if nobody buys it, your business dies.
According to Forbes, the #1 reason 90% of startups fail is
“They make products no one wants.”
They didn’t invest in Marketing to research the market or once they had a product, they didn’t build a marketing or sales system to attract buyers. You can only burn so much cash in operations before you start suffocating without oxygen (customers). So Marketing is priority for cash over Operations!
Clients Keep You Healthy
What would happen if you invested more dollars into Marketing, before Operations? Would that help your business? How much healthier would your business body be with more oxygen flowing through your system? Think about it.
Are you prioritizing your dollars in the right place? Do you know what your industry average is on marketing spend? Are you above or below it? There’s a reason there is a benchmark for marketing spend by industry. It’s required to live.
Don’t be “penny wise, pound foolish” in your marketing budget. If you invest your marketing dollars right, it will fund your operations and the rest of your business body!
Take the Organizational Checkup to gauge the health of your company! For more information on creating a healthy business lifestyle, read about the Entrepreneurial Operating System (EOS).
To Your Business Health!