How Should Professional Services Firms Invest Their Marketing Budget?

Speaker A: Foreign.

Speaker B: You're listening to Rattle and Pedal Divergent thoughts on marketing and growing professional services firms. Your hosts are Jason Malicki and Jeff mckay.

Speaker A: So, Jeff, I'm gonna ask you the most important question in life to open this episode. Are you prepared? Seriously, are you prepared?

Speaker C: Yes. I know the meaning of life.

Speaker A: Oh, that actually is the most important question. Save that one to the end for anybody that's listening, because I don't want to give it away right away. So if you do know the meaning of life, that's the other question. Now, this question is, are you fundamentally a spender or a saver?

Speaker C: Oh, I'm a saver. I'm definitely a saver. Yeah. Did you think it otherwise?

Speaker A: No, I actually didn't. So when you spend money on things that are frivolous or feel frivolous, uh, does it hurt? Is it, like, painful to you?

Speaker C: Yes. I feel guilty if I spend money on frivolous things. I'm a very pragmatic person.

Speaker A: Do you feel guilty when you spend money on even things you need?

Speaker C: No, not too much. If I need it, then I'm willing to spend the money on it and buy something good. But, no, I'm not a frivolous squanderer of money.

Speaker A: So we're talking about budgets today. That's why I asked the question. So maybe the existential question, is marketing a want or a need? I always joke that marketing exists to turn needs into wants and wants into needs. And for firms, is marketing a want or a need? I think in some firms, it's a want. They don't really fund it, so that's why it has no budget. And other firms, it's a need, and they invest in it heavily.

Speaker C: So that is.

Speaker A: I don't want to get too existential.

Speaker C: Well, you already got us to existentialism.

Speaker A: Um,

Speaker C: that was not the question I was expecting from you. Uh, is marketing a want or is it a need? I like that question. I would be curious. We should do a research study on just that one question.

Speaker A: It would be really interesting because, you know, I mean that when I say it. I use this a lot like I used to do when, uh, my kids were little. They would actually ask me to come into the elementary school and talk about marketing, and I would. And what I would talk about with young kids is I would show them how consumer marketers turn wants into needs and needs into wants. They take things like water, that is a need, and they make it a want by branding it. They take things like expensive, fancy handbags that are wants and make Them feel like needs. You need to have it for your identity. That's magic of marketing. It's this kind of weird juxtaposition of those two concepts that are taught to you in kindergarten, and they muddle them up for the rest of your life.

Speaker C: So, again, how did the kids respond to that?

Speaker A: Oh, they enjoyed it because the way I would do it, I would bring in, like, all these waters. I was like, here's 20 different types of water. What's the difference? And they were, like, trying really hard to figure it out. And then eventually they would come to the realization that it's like, this is water. There's nothing different. It's just packaging or whatever. All right, so we're talking about budgeting. How should you invest your marketing budget? Not necessarily how much, but how should you invest? At least that's the working title. Maybe we'll get to how much.

Speaker C: So is the existential question now, how much should I spend on marketing?

Speaker A: Uh, yes.

Speaker C: And it differs by how much should you spend on it if it's a want, how much did you spend on it if it's a need?

Speaker A: Well, the interesting thing about that, as I asked that question to you, I don't know, the answer is if it's a, uh, want, do you spend more? And if it's a need, or if it's a need, do you spend more? I'm not entirely sure.

Speaker C: You're not giving our listeners much confidence, because now they're going to think, well, by the time I get to the end of this podcast, I'm going to be so damn confused I'm not going to know what to do.

Speaker A: Well, that's just because you're on the line. All right, so let's break this down. So we're going to talk about how you should invest your marketing budget. Where do you want to start? Because I think where we plan to start, you might suggest we start elsewhere.

Speaker C: Let's jump in where you want to. All right.

Speaker A: Well, I think that the starting point is what goes into a budget. To me, there's a couple of tensions here that I see in firms, and this shows up whenever you look at benchmarks. This topic came up in conversation with someone you and I were talking with, and, uh, the topic of benchmarks came up, and I kind of made the comment that the benchmarks I see for professional services marketers and what they spend, I don't actually ever see any firms in the market spending what the benchmark says. So I always sort of question the validity of the benchmarks. But then the thing that pops up is what is actually in the budget. So if you ask a marketer or you ask a firm leader, what do you spend on marketing, you're not getting an apples to apples comparison whenever you do a benchmark because different firms allocate different things to marketing. Some firms have a dedicated marketing budget and a dedicated biz dev budget. Others do not. Others have it merged. Um, a lot of firms marketing is really just a glorified sales support function. So in a firm like that budget, there is no marketing budget. In actuality, the budget that they're describing is a sales support budget. So, uh, at a high level, what goes into a budget? So I just want to talk about that and maybe rather than going through it in detail, we just talk about the tensions that I just pointed out.

Speaker C: Well, if you're listening to this podcast and you take nothing else away, take this away, that, uh, budget benchmarks are absolutely worthless. And some very popular growth studies exist just to obtain that one number. And it's just they're absolutely worthless. And I'll say that kind of unequivocally, and you've kind of explained why. But I think even more important, it's just fundamentally the wrong question to ask or the wrong answer to seek is some percent of revenue. I don't think it's the way to think about it at all. I mean, there are just the realistic, uh, and tactical reasons that you just gave accounting categorization alone. But that's not even, uh, the main reason for doing it. Just don't rely on those studies because they're not getting you to the right strategic answer.

Speaker A: Sir, if they don't get us to the right strategic answer, and I'm trying to figure out how much to budget, I shouldn't start with a benchmark. So where should I start?

Speaker C: What's the business objective you're trying to achieve? And work back from there. Because marketing should be thought. All right, so I'm biased, of course. I say marketing is a need, not a want. Want. And marketing is going to help. You should be helping you achieve that strategic objective. And I see four strategic objectives, broad based, that firms should be thinking about. And the investment towards that strategic objective, it will not dictate, but it will clarify what the investment number is in the areas in which you should be investing. So I mean, for me those four areas are, one, are you trying to build brand preference? Two, are you feeding future demand? So demand creation number three, and I think most firms think in this term and they probably need to free their Minds a little from it. And that's lead gen. The fourth is market intelligence. A deeper understanding and shaping of the markets. That's one of those four year objectives.

Speaker A: What about proposal support, Jeff? I thought that was the most important thing. Um, so, uh, it's funny because as you said that when I got into this 25 some odd years ago, when I got into the world of marketing coming out of business school, I feel like the marketing world community that I came into was focused on brand preference and demand gen primarily. It was always everything we did and everybody we worked with. That's what you were talking about is how do we build a brand over time? How do we create demand for this product, this service, this practice, whatever it was. I feel like in the content era, uh, we morphed into this lead gen machine Somehow someone somewhere said, oh, lead gen is not a sales activity anymore, it's a marketing activity. Shoved it over to marketing and marketing in this movement to content and inbound. And SEO was tasked with figuring out lead gen. And I don't know that it's always gone well. At some times I think it's worked great. At other times I'm not so sure. But I do feel, uh, we did that episode on the resurgence of brand, and I do feel like we're making a full circle journey here where because of the collapse of inbound and because of the collapse of SEO, lead gen will start to get pulled away from marketing again and pushed back into more of a sales function. Maybe that's where it always belonged.

Speaker C: Yeah, I agree there were some good things that came out of the inbound phenomenon. I think it brought a marketing discipline that was lacking in professional services. So it gave it some rigor. But it subsumed, I think, the more important dimensions of marketing, um, and eroded the quality of the branding, the positioning of firms. So I think your observation is an astute one. Where it settles, I don't know. I wouldn't throw the baby out with the bathwater, um, so to speak. But what's the right mix, I think is a strategic question that firms need to be asking themselves.

Speaker A: I do like your four objectives a lot, by the way. It's funny, uh, when we set this episode up, I didn't bring those out and you brought them out. And I'm glad you did. Because when you're trying to figure out what you're spending on, it's a function of what you're trying to accomplish. And if you're trying to accomplish lead gen, what you're spending on looks a Lot different than if you're trying to build brand preference. And how much you're spending is going to fluctuate as well. What's probably most painful about this is, I just want a number. Jeff, can you just give me a number? 7%. Just throw a number at me. That'd be a lot easier.

Speaker C: Um, it would be a lot easier. But let's say you're a $10 million firm, and we say 10%, that's a million dollars. All right, now what?

Speaker A: Yeah.

Speaker C: You still have to answer the fundamental allocation question.

Speaker A: What are you going to do with that?

Speaker C: Yeah.

Speaker B: Yeah.

Speaker C: And I would argue, and maybe this is arrogant of me as a marketer, and I believe this played out over my career. A firm is going to make that strategic decision about what's the number. You have to work with the number at some point. And I've had marketing teams that if you gave us, uh, $250,000 versus a million, I would still say we're going to out market you, we're going to outperform you. Because that was the confidence I wanted to instill in my teams, that we'd outwork, we'd outsmart other firms who were spending just frivolously, that we could be better. Now, granted, there is a number of critical mass associated with that, but it's not the number. It's just not the number.

Speaker A: Well, let's talk a little bit about if benchmarks are the wrong way, then what's the right way?

Speaker C: Just ask me that question.

Speaker A: Uh, absolutely. Absolutely.

Speaker C: Give me the answer to that question. Well, we've laid out what the first thing is. What are you trying to. To achieve? And I think those goals differ by where you are as a firm. Not just size, but mindset and the economic realities of a firm. There are firms and, uh, maybe this is stage of development. Maybe that's the best way to think about it. Not size, but stage of development would dictate what your marketing mix is. And I don't know, maybe. Does it make sense to talk about what we are considering marketing and what marketing mix is?

Speaker A: Sure, yeah.

Speaker C: Well, when you think of marketing mix, what do you think of.

Speaker A: Well, when you say marketing mix, I guess I go to maybe. Really? I always kind of split it into content mix and marketing mix. So content mix might be the mix of thought, leadership content and marketing content that you as a firm need to generate, inclusive of what you might invest in research and writing and design and video and audio editing and everything along those lines. Right. And there's the work of building A point of view and articulating it and bringing it into the market, um, in an interesting, compelling way. And then I see kind of the marketing mix is sort of downstream from that frequently where it's okay, how do we get that message to the right people at the right time? And that's then looking at, uh, are we going into an event, are we trying to get speaking slots at third party events, are we hosting our own events, are we going to put ad money behind this, are we going to work with a PR partner to get article placements or earn media opportunities? So I tend to like to split those two apart because there's an investment that needs to be made in what you are going to say and there's an investment that needs to be made in where you say it. So that's what I see of as marketing mix and content mix is how I think about it. Now, full disclosure, I don't think that's the totality of the budget. Right. There's other stuff that probably needs to go into a budget as well. So you can't just look at those in isolation and say, well, we've identified the budget. Right.

Speaker C: So you think of marketing in terms of content and marketing channels.

Speaker A: Yeah, it's message and channels. Message and medium. Right?

Speaker C: Yeah, yeah. And then that would kind of be the programs that you're going to run. So, um, that's a very traditional kind of perspective on professional services marketing. I would think it's interesting because when I think about it, I'm thinking about product development as well.

Speaker A: Well, time out, time out, time out. You asked me the question of marketing mix. So that to me is not product. Product development. Yeah, that should be part of marketing. But that's not what was. That wasn't the question. So like, I mean, like, that's, I'm not disagreeing, but you asked me a different question than that. I think so.

Speaker C: Oh, I don't think so. I think we have fundamental different starting points there. That's interesting.

Speaker B: Yeah.

Speaker C: Ah, um, and we hadn't even touched on that about what investments do you make in product development and is that part of marketing or is it not? Uh, so I think listeners are probably kind of getting a feel for the complexity of this. Right. In our discussion is two experts in this space. We have fundamentally different perspectives about what's going in, what's going not or not in, um, and what is marketing responsible for or not responsible for? And I think that leads to part of the confusion.

Speaker A: I mean, in my experience, most firms don't really look to marketing for assistance on product development. Yes, I think they should. In fact, I made that joke about when I came out of business school. I mean really, if I wanted to really rewire that, I would tell you that what you're taught in business school is that product development is the domain of marketing. That is the fundamental job of marketing. But in my experience in practice in the world, that's very rarely the case. Um, and I don't know if that's good or bad. It's just reality.

Speaker C: Well, it's good and it's bad. Um, the irony of that. And I just had a conversation with very talented marketer who's in throws of commercialization. Right. The CEO has said we need to begin commercializing the solutions more effectively. And when it's left to the line, they always produce things that are not market focused, uh, at all. And I think there's a fundamental flaw in that. And we're getting off on a tangent here. I want to bring us back, but I feel like the marketing spend that a firm has is a tax, if you will, on the lack of strategic clarity. Uh, if you're not clear about what you're trying to achieve, what business objective and what marketing's involvement is in that, you're going to be paying a premium investment in order to try to accomplish an unclear goal. So for all this rambling that we're going through, I think that's the kind of essence that um, is really important to take away is you have to start with the strategic clarity in order to get to what the investment is going to be. So we got off on a real tangent there and it's all your fault. So I'm going to pull us back. Uh, I'm kidding. That was all my fault. You've just got my brain racing again as you've kind of outlined these things. So let's, let's give some structure to this so that people can actually start to think about how they're going to allocate the monies that they have for growth because that's essentially what they want.

Speaker A: Honestly, I think for this discussion I would set aside product development and say let's not talk about that as part of the marketing budget right now. I think if product development is part of your marketing domain, then absolutely that needs to have its isolated budget because that's a very different thing than sort of getting the message of the firm and um, its value proposition into the hands of key decision makers and building brand preference or driving demand or whatever your core strategic objective is.

Speaker B: You're listening to Rattle and Pedal Divergent thoughts on growing your professional services firm. Your hosts are Jason Malicki, principal of Rattleback, the marketing agency for professional services firms, and Jeff McKay, former CMO and founder of strategy consultancy Prudent Petal. If you find this podcast helpful, please help us by telling a friend and rating us on itunes. Thank you. Now back to Jason and Jim.

Speaker C: Can I propose something?

Speaker A: Yeah.

Speaker C: Let's talk about what type of firm or what stage of development a firm is and what a marketing mix using your kind of definition of marketing mix would look like to give a rough outline for how firms should be thinking about this. I think that might be useful for people.

Speaker A: Um, okay. Um, or another idea. Yeah, lead us down that path. So start with. So maybe, you know, two firms. So firm one is early in its journey, it's trying to figure out its product market fit, perhaps trying to determine which segments are its best segments. I don't know where you are.

Speaker C: You just said product market fix after you had said that marketing should have nothing to do with product development.

Speaker A: Uh, no, that's not what I was saying. That's not what I'm saying. I'm basically trying to lead down the path of your market intel example where it's like in a lot of early firms, that's what they're trying to figure out is market intelligence is they're trying to figure out do people resonate with this message or that message or this offering or that offering.

Speaker C: So let me position this right. I think there are like four stages a firm could be in.

Speaker A: Okay.

Speaker C: Um, and that would dictate kind of the marketing mix. So let me start with the first one. And we see a lot of firms in, in this stage, I call it the survival phase, where they are just hand to mouth. Um, and we've talked about these types of firms recently when we were talking about point of view and thought leadership and things like that. They're founder led, the founders out there selling. They have unpredictable revenue, their pipeline is up and down, they're living in feast and famine. They're not hyper specialized because they haven't made a strategic decision. They're hand to mouth. Whatever comes in is fine. And chances are they probably don't have dedicated marketing resources. Or if they do, they have kind of a junior one that is just a gopher and doing whatever they're doing. Does that sound like a typical type of firm that exists in this space to you?

Speaker A: Yeah, I would argue they have no marketing budget. So there's no discussion to be had though, right?

Speaker C: Yeah, yeah, well, but they have to deliver growth. They have strategic objective of growth. So they've got to be out in the market. Isn't that marketing? Somebody has to do the marketing even if they don't have a dedicated marketer or marketing budget. There is a tax, as I said, on that lack of strategic clarity and investment. You're going to pay for it one way or another. But I think firms like this, the mix is relatively straightforward. It's going to be the majority on lead gen, but the lead gen is going to fall on the founder and the line. People with outreach and networking referrals, you know, attending events, maybe having your own events, I don't know. But they're generally going to come through, you know, partner relationships. In old school selling, they're bird dogging leads, straightforward. And then the other area, marketing budget. Yeah, I think there is no difference between business development and marketing in a survival firm. They're just out there trying to surface whatever they can, however they can. So from a sales enablement perspective, sales support, as you said, I think this is another area where they start to invest, whether it's outsource or somebody within the firm allocate some money towards case studies, proposal support, whether that's a proposal writer or not. They going to have a website. Whether they support it themselves or not, they're going to have to allocate that cost for that and they're probably going to have some kind of CRM. Does that technology go under marketing or not? But you're going to need it to, to track what's going on and maybe, maybe they start to dabble in what you say, um, of starting to create some content, some thought leadership, some POV pieces. There has to be money allocated to those. So I think when you're in survival mode, the majority of your investment is going to be in lead gen and sales enablement.

Speaker A: Okay, what's your next of the four?

Speaker C: Um, I would call this one um, stable firm. They've reached some level of stability. They're not feast or famine. Maybe they've hit six or seven figures in revenue. They're starting to kind of specialize. They're getting their footing, they're starting to see where the product market fit as you said, is taking hold. And now they may have more than just a founder rainmaker but they're starting to have a more formal sales capability. There's some stability to it.

Speaker A: Okay, uh, where do you think the investment shifts there?

Speaker C: So I think you start to um, pull back from the lead gen. It's not so much hand to mouth. I don't know. A third of your budget goes to lead gen. As you get more stable and now you start to build brand preference. So more on the thought leadership, more demonstration of that expertise that you talked about. I think now you have the space to breathe and you have a little more revenue to invest in more formal and higher quality thought, uh, leadership. So you begin to differentiate yourself.

Speaker A: Okay, where do we go from stable?

Speaker C: Well, I think in stable there's other investments that you start to make. You still have to maintain to some degree the sales enablement. I just don't think that ever goes away given the IC triad and the integration of marketing and sales and that issues and solutions combination. Um, so I think that exists. But I think as you start to invest in, um, thought leadership, you have to start investing in market intelligence as well. Once you start to get stable, it's not going to be a huge part, but you have to start doing more voice of the client type of work.

Speaker A: So you're investing in, in this case, you're using market intelligence in the context of you're investing in research to gain intel, not using marketing as a way to gather intel or maybe both. But okay, um, so I think the

Speaker C: bottom line, you're moving away from hand to mouth and you're starting to think more strategically about how to invest those dollars. And the concept is I want to differentiate my firm and start building preference. And now I have the resources to start doing that. The next one is, I'd call it scale. And this is where firms have solidified their market positioning, but now they want to expand the performance envelope. And this is a place I think firms really struggle to go from that stability to now we're really going to create a differentiated firm. And it's starting to wrestle, if you will, the vibrancy of the firm in a way where you're making strategic investments. You're starting to say no and yes to the right things. So, you know, and the reason that happens, you're no longer a single practice. You're going to have multiple practices. You're going to start bumping up against really sophisticated buyers or buyers of, um, competitors. And you need a more sophisticated approach to sales, sales and marketing. So in this one, I think now you really start to pour into differentiating the firm with intellectual capital. This is where the Jason Maliki's of the world start to come in and really start to build out those branded content experiences as you describe, where you're really investing in stuff, uh, that differentiates you the marketing channels as you described, I think start to get clearer and real investment gets put into them. You know, whether that's speaking opportunities or priorities or like I said, the branded content stuff, those things are high dollar investments and they're not one year investments. They take time to come to fruition. But the majority of your marketing mix is built on trying to differentiate, uh, the firm. And then what cascades out of that is the demand creation because you have stability now you can start to work on demand creation in seeding the market for future lead gen. And you have the luxury of doing that because you're not hand to mouth. But I think you still also were making investments in sales enablement. Right? You got to have the sales support in order to be effective. And you start to invest a little bit more in market intelligence because that's what fuels the, uh, differentiation and the point of view. And I think those three types of firms are 90% of the firms that are in professional services.

Speaker A: All, uh, Right. So who is the remaining 10?

Speaker C: The fourth one, I think are the market leaders. And this is where people get confused. They try to market like market leaders when they're not market leaders. So these are the accentures and the McKinsey's, um, you know, the big four names, if you will. They influence the categories. You know, they're not trying to compete in them. They are the category. We are the big four, right? We are the big three. And the majority of that money goes into brand preference still differentiation of the firm, original research, you know, the industry narratives that they create, they start to have the wherewithal to actually shift media and how the business community thinks about things. But the majority of their budgets are all in brand preference and market intelligence. And most firms don't have the luxury of being there. But I mean, when you think about a firm like McKinsey and you talk about marketing mix and what goes into marketing mix, uh, I mean, they have dedicated research teams. Whether or not that's part of the marketing M budget. I mean, they have research teams that dwarf the size of conventional firms that uh, are in the other three categories just spending money.

Speaker A: It's interesting because having worked around thought leadership for a long time, one of the big questions that was constantly asked in that community is should thought leadership and the editorial function and the research function be inside of marketing or should it be, uh, somewhere else? And a lot of firms, at various points in time, like at Accenture, they took the whole research function and editorial team for a while anyway out of marketing and moved it over and reported up to the chief strategy officer, uh, or even directly to the CEO sometimes. Because to delineate your objectives a little bit more, it was seen as like marketing was too short term. Focused marketing was the mindset of marketers was we got to move the needle in the next 12 months and they really wanted those research engines and those thought leadership engines to be looking out years or decades. Right. How are we going to shape the market over the next three, five, seven years? And so to your point, that was one way I've seen some of those large firms handle that. I really like your 4 delineations here a lot. In my mind as you're talking about it, I see sort of like this, uh, continuum of lead gen biz dev activities on one end and at the other end sort of thought leadership, demand gen and other brand preference building activities at the other. And it's like a sliding scale that sort of shifts a little bit over time as a firm evolves. The funny thing is that when you say that though, a leading firm M, to use your language, would still spend way more on lead gen and biz dev than probably most firms at the survival or stable stage. Just because it's a much larger firm

Speaker C: in terms of absolute dollars.

Speaker A: Absolute dollars, right. It'll be a very small portion of their spend. But they're still. I don't want listeners to walk away with this idea like, oh, they're not spending anything. That's not true at all. They're spending a ton on those activities. But just as a percentage of a whole, it's pretty small.

Speaker C: And they may not even call it legion. Well, no, I don't know what they would call it, but it's instead of lead gen, it's lead capture.

Speaker A: Yeah. So, all right, well, let's close this out. What's our advice? What's your advice? The client just says, hey, Jeff, how much should I spend on marketing? What is the answer? I mean, not like the number, it's more like what do you tell them?

Speaker C: So if you think about the categorization, you know, if you're an early stage firm, you're going to spend marketing dollars to find opportunities, you need to spend the amount of money that is going to identify the number of opportunities you need to fuel whatever the growth you want. And if you can only invest enough money to find enough opportunities, gives you 5% of growth. That's what it's going to give you. But if you have the wherewithal to spend 25% to find that level of opportunity, you're going to get that level of opportunity. But you just have to think how many opportunities I need to get to X number and then work backwards from from there. For those survival firms, I like to

Speaker A: tell firms almost any one of those first two, maybe even three levels that you think about that investment, like a continuum. What I mean by that is that logically, the more money you invest in marketing, the higher the likelihood of you getting your stated objectives goes up. Um, and so some of it is like, how much are you willing to invest and able to invest to get the confidence you need that you'll hit the target? And part of that's your decision. Because on some level, marketing is still an art and there's still, uh, an unknown to this thing. It's very rare where a firm can predict we're going to put X amount in the marketing and Y is going to come out every time, every quarter. There are very few businesses that can do that. There are some that I've encountered over the years, and it's a pretty remarkable thing. That's a topic of a different conversation. But very few firms exist in that zone.

Speaker C: That's a great point.

Speaker A: One way I like to think about it is, well, if you invest this much more, the likelihood you're going to get what you want goes up dramatically. And sometimes when we talked about mix and channel, sometimes that's what it is. I always try to tell a smaller firm, it's like, don't try to do everything. You don't need to be everywhere. Have a podcast, do a podcast, do it really well. Have a newsletter, do it really well. I mean, do one or two things and do them exceptionally well versus trying to do 10, 12 things. Now, you look at a huge firm like Accenture, they kind of do everything right. I mean, they got a gazillion things going on in every possible direction. And you don't want to. You can't be that. So don't try to be that.

Speaker C: Uh, that's good advice. If you want to increase the ROI of your marketing investment, the best thing you can do before producing anything or distributing anything is to get focused. Uh, and this is so critical and it's so hard for firms, but it's a message that you and I send to our clients. You can't be all things to all people. And if you want strategic lift, you have to have a fulcrum point that allows you to punch above your weight to mix a bunch of metaphors.

Speaker A: You gotta stay focused on your metaphors.

Speaker C: Yeah, get focused on something. Some market, some Type of client, some size of company, some particular problem, and you might start a little slower, but you'll have higher dividends for the amount of money you invest. So if you're in early stage and you're trying to find opportunities, it's a lot easier to find those opportunities when you clearly define what they look like. And that's where most small firms go awry. When you're in the growth stage, um, of your development, I think you start spending more market dollars to create preference. And this is where most of the firms listening to this podcast probably, probably exist. You need to start investing in the things that drive preference. And that's going to be expertise results in simpatico, that mix. But I think in its simplest terms, your branded content experience is the way to think about it. What do we want to be known for and what is that seminal point of view piece that we're going to use as a fulcrum for building brand differentiation? Yeah, because once you have that, the marginal cost of distributing it in today's world is minimal. If you have the right tools and you have the right marketing person or people on your team. You said this earlier, a one person marketing team could out market a larger team and if they have the right positioning and um, tools in order to do it.

Speaker A: Yeah, now more than ever, I mean, I think it's becoming more and more every day.

Speaker C: So the last one is not really relevant to all of our listeners. But if you're a market leader, your marketing dollar's going into shape in the markets. That's why you're market leaders. It's that simple. If you're not shaping the market, you're not gonna be a market leader for, for long. Uh, I'm not saying that somebody in early stage can't shape a market. It happens. But it takes incredible focus in order to do that. But market leaders are out there and making investments to shape markets.

Speaker A: Yeah. All right, so I guess we're going to leave with the, um, classic consultants answer. How much did you spend on marketing and what should you spend it on? It depends.

Speaker C: Well, for all of my rambling, um, I think we've given a pretty clear answer. You need to define where you are in your development and then that's going to dictate your mix. Once you have clarity on what's the business objective you're trying to, uh, achieve. So don't think in terms of a percent of revenue. Think in terms of what am I willing to invest in order to grow. And if I want 5% growth, I don't have to invest as much, but If I want 50% or 100% growth, I have to invest in a totally different way. Um, it's just that simple. But I think most people just think, hey, I want to grow at 10%. Okay, then here's your marketing mix. Here's the things that you should focus on. Go grow at 10%. But that's the question. How fast do I want to grow, and what am I willing to invest in order to achieve that growth? Not as marketing a want or a need, not what percent of revenue should I spend on marketing, but what level of growth do I want and what am I willing to invest in order to go after it?

Speaker A: And I would add a third is how much risk am I willing to accept on achieving that outcome? Because that's what I was trying to say is, like, if you invest more, the risk goes down, you invest less, the risk goes up.

Speaker C: So, yeah, yeah.

Speaker A: Not zero cost linear.

Speaker C: There's a cost to underinvesting.

Speaker A: Yeah.

Speaker C: There is a cost to underinvesting.

Speaker A: Absolutely.

Speaker C: And it's an unseen cost, but it's a. It's an opportunity cost for firms, and they need to factor that in as well.

Speaker A: All right, man. Well, this was good. Thanks for. Thanks for, um. Thanks for breaking it apart with me.

Speaker C: My pleasure. I'll see you later, buddy.

Speaker A: See ya.

Speaker B: Thank you for listening to Rattle and Pedal, Divergent thoughts on marketing and growing professional services firms. Find content related to this episode@rattleandpedal.com Rattle and pedestrian pedal is also available on itunes and Stitcher.