Management guru Peter Drucker once pointed out, “Marketing and innovation are the only two things in business that make money; everything else is an expense.” Most people have heard of Drucker: he's a legend in business management circles. He was instrumental in making General Motors more profitable in the 1940s, and he did so by carefully analyzing everything they did from the inside. That led to his famous quote.
Marketing is the sum total of the things you do to bring in sales, including advertising to attract new customers and transacting more business with existing customers. The framework you put in place to do that is your marketing system. I specialize in helping my clients adopt marketing systems that automate most of these factors. Automation is hugely beneficial in marketing. For example, when done correctly, direct response marketing is superior to even the best door-to-door salesperson. So I especially teach DRM, where you send out sales letters to make your sales sales presentation, along with follow-up systems to convert leads into sales, associated with ungoing systems to keep doing more business with existing customers.
Innovation includes invention and creativity – the process of doing things differently than everyone else. If you have something that you've created, and it's working to bring in new customers and excite your existing customers, and your competitors notice that and are jealous of what you're doing – well, that's the kind of innovation you're looking for. You want them to go nuts because they can not figure out exactly what you're doing-or even if they can see what you're doing, they can not duplicate it. It's a little mysterious, an unknown quantity just off the radar.
You have to do things that make people stand up and pay attention – especially the people you're trying to sell to. Innovation will result in more business.
Everything besides marketing and innovation is an expense . I could include a long list of all the things that make up the other category. You know what they are in your own business, though maybe they're a little different in other businesses and marketplaces. Whatever they may be, they do not bring in the revenue or the sales. So spend your time on marketing and innovation; let other people focus on fulfilling your business's other demands. That may mean hiring people to take care of your accounting, or using a fulfillment center to send orders to your customers. If you focus on innovation and marketing, you'll find yourself bringing in more revenue with less effort. You'll have more happy customers, and fewer cash flow problems.
The people who really get innovation and marketing are the ones who make the most money, because the simple fact is that most businesses have little time for innovation, and almost no time for marketing. A few years ago, a friend had an opportunity to speak to the late Dr. Gary Buss; he asked Russ what he did, and when Russ told him marketing, he responded with, “Boy, that's where the action is.”
Buss then went on to say, “I made money in real estate, and then I took that money and bought the Los Angeles Lakers, and it's been a great success. But even with the great players we've had, like Magic Johnson, Shaq, and Kobe Bryant, we had to constantly market. I did everything I could to get the Hollywood crowd involved, because I knew that if those Hollywood types would come to games and sit at courtside, it would be a big plus. have a great team, you can have a great business, but it can go away quickly if you do not know how to market. ”
I was impressed to heart that, and it really drve home this concept that it all comes down to marketing and innovation. Oh, there are other significant things you have to do; do not get me wrong. You have to have someone to take care of the financial part of the business and run it day-to-day. Personally, I'm a terrible business person, so I know the importance of surrounding yourself with people who can handle the everyday affairs. The bottom line is to never, ever forget marketing and innovation.
So far, I've read the book Steve Jobs by Walter Isaacson several times, and I've listened to the audiobook as well. This book was published right after Jobs' death. According to Isaacson, some of the people who were closest to Jobs said that there's never been a CEO who spent as much time so completely focused on the marketing and advertising end of the business as Steve Jobs did. I thought that was very instructive, because after Jobs came back to Apple in 1996, during those 13 years before he stepped down and then passed away he made Apple the most profitable company in the world. He did it partly through marketing, partly through great innovation.
One of my heroes is the late, great Ray Kroc of McDonald's fame. During the 1960s, when fast food was taking off and suburbia was spreading rapidly, there were hundreds of companies trying to knock off McDonald's. One day a reporter came up to Kroc and said, “You have hundreds of competitors now, popping up everywhere. Ray replied, “We're going to innovate faster than they can copy.” There's a lot of wisdom in those words.
Constant innovation makes you the competitor Everyone is trying to beat. You're always looking for new and better ways to do everything, and that's tied directly to the marketing itself. Marketing is all about how the customer views you, what the customer thinks about you, how excited they are about doing business with you and about buying the products and services you develop. It also includes your ability to connect with them, to create bonds that keep them coming back again and again for as long as possible. Think about that. The most innovative companies are also the ones doing the best job of marketing – and vice versa.