Sustainability is a hot concept these days.
We shouldn’t be doing things to the environment that we can’t continue because they consume resources and don’t renew them. The lumber industry these days is sustainable; they plant as many trees as they cut. Oil is not sustainable though how soon we’ll start to run out is highly controversial.
Another word for the same thing is viability: the capability of something to continue on, to survive on its own.
In finance it’s what’s known as a positive ROI – Return on Investment. More dollars gotten back than dollars invested.
It’s an important concept for marketing as well.
A sustainable marketing effort has to cost less than the marginal net profit from the sales resulting. In short, if your marketing costs $1,000, and generates an additional $5,000 in sales, which cost $4,000 in cost of goods, labor, sales commissions, etc. etc., you’ve only broken even.
You need to do at least a couple dollars better than that to be able to continue a marketing effort indefinitely.
In the short term, “big bang” marketing efforts often are launched knowing they are probably not going to pay for themselves. That is done to jump start something. It’s also done knowing you don’t intend to continue it. Usually you then scale it back to something you can afford on an ongoing basis.
If this seems like beating the obvious to death, I can’t tell you how many times I’ve dealt with small business owners who have NOT made a computation like this in planning their marketing efforts.
To expand, you have to develop a sustainable marketing program that is also scalable – meaning it can be increased in size.
You have to be able to measure the ROI of your marketing efforts. That can be difficult. But it’s essential.
Otherwise the more you spend on your marketing, the faster you go broke.
Sustainability
