Compound Interest For Marketing


Long ago, I freaked out when I read one of the first quarterly statements regarding the performance of my 401k. I was ALREADY LOOSING MONEY!

Thankfully, someone slapped me out of my panic and reminded me that financial investing is all about money growing over time… as in 2, 3, even 4 decades. 

The same holds true with marketing. With money, compound interest is the exponential growth of returns generating returns themselves. In marketing, compound interest is the exponential growth of people who are interested in your brand.

The following are simple rules from financial investing that I have adapted to a marketing perspective. In simple terms, Marketing is about building connections with potential audiences.

I: NEVER STOP INVESTING

Retirement contributions are applied at every paycheck because that is what it takes to build a good financial foundation. Marketing needs to be done with both consistency and constancy. Make sure there are budgets for both funds AND time/effort and that these are identified as “critically important”. 

This is your BRAND NEST-EGG. Failing to invest properly will lead to terrible consequences years from now.

II: ADJUST MEASURING FREQUENTLY

Marketing is about building momentum. Begin with reasonable expectations and don’t be afraid to lower them in the early days and on Wednesdays. It is challenging – especially in the early days when we are desperate for immediate gratification. With surprising speed, momentum from previous efforts will help sustain your work today and tomorrow. 

Don’t be distracted by what others are doing – especially on social media – and constantly refine what you measure and how it relates to YOUR overall objectives.

Things sometimes worth measuring include: Names/addresses in YOUR database, Subscribers (active or total), Clicks, Forwards, Unsubscribes, Likes/shares/comments, Inbound inquiries/requests, Leads, Direct sales conversations, Revenue growth, Your confidence

III: FRANTIC = FAILURE

It is easy to overreact to the performance of one single post, speaking engagement, or initiative. Don’t be rash, emotional, or make decisions willy-nilly. You cannot be everywhere nor can you connect with everyone. Not even with a budget of Eleventy-Billion-Dollars. Trying to do so is a waste of resources.

Begin with what you know and apply a focused approach to adjusting expectations and key metrics. 

IV: ANTICIPATE LOSSES ALONG THE WAY

At some point, you will experience major losses – be it changes in platform, legislation, audience trends, competition, pandemic, you get the point. There will also be lots of little losses too. Be sure to get the lessons or the costs will quadruple!

The real beauty is that you develop systems for building connections with potential audiences. It is about people, not venues, platforms, media, etc. This will help you gracefully whether such changes. It helps to have data back-ups regularly and ‘own’ as much of the process as you can.

V: MODEST RESULTS ARE AWESOME

Everyone likes the feel of winning big! Often, the costs that lead up to it are far more than it is worth. 

Develop programs that focused on delivering on feedback, AND cash-flow quickly and efficiently so that they can be repeated over and over with little tweaks. This brings stability to your effort and your overall finances, allowing you to have the capacity to deliver on the Big Win. 

Some clients get creative with their little wins by diverting a small portion of funds to be banked (as in actually deposited into another bank account) until it becomes enough for a big program!

I hope this inspires some of you to make changes in the way you approach marketing. Please drop me a message or leave a comment with your thoughts.

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