5 Ways Effective Marketing Makes Your Business Worth More

A greater focus on marketing can lead to greater sales.
April 24, 2012

Many business owners dream of one day handing their keys over to another dreamer or even larger organization. If you have a vision of selling your business in the future, you’ve got to focus on marketing instead of simply focusing on sales.

Some might ask, what’s the difference? Marketing is how and why people think and talk about your business, and the experience they have with it. A greater focus on marketing can lead to greater sales.

Below are five reasons why it also makes your overall business more valuable.

1. It creates a repeatable system

Done right, marketing builds the kind of repeatable momentum that can be documented and taught like a system. If a potential buyer can see how they too could operate your marketing system, even after you are long gone, you’ll build value.

Start looking for ways to create and document a marketing system that you can teach others to run, and then remove yourself. If the business has to depend on you to make it successful, how can run it without you?

2. It builds the value of your products and services

marketing strategy allows you to carve out a clear point of differentiation (and perhaps a narrow market focus) so you can charge a premium for your products and services. When a market comes to view your business as the obvious and maybe only choice for their needs, they also expect that getting that need is going to come at a premium.

If you stay in the price war game, there will be no reason to think someone will value your business over one that claims to do the same thing.

3. It encourages customers to sell for you

A business that takes a marketing view over a sales view understands the most powerful form of lead generation is from existing happy customers.

When customers have a great experience, one worth talking about, the value the business receives in terms of referrals can send the overall value of the business through the roof. In fact, there are countless examples of companies that aren't yet profitable that get tons of buzz and sell for what seems like ridiculous amounts.

4. It generates multiple revenue streams

If you must go out each month and build your business from new sales, you’ll always be tied to the whims of the next deal. Few potential buyers will see much value in that.

If, however, you can build a business that includes recurring revenue streams and find ways to converge those streams to make them even stronger, the value of the business for any buyer will become crystal clear.

Recurring revenue is generated from an effective marketing strategy teamed with an effective customer service approach. This combination can practically guarantee a successful transition to a new owner.

5. It prevents a commodity sale

Experts rely on certain data, such as revenue, profit and market conditions, to assign a value to business being bought or sold.

When your business comes with a documented road map for operating an ongoing marketing system, is the market leader, charges premium pricing and receives support from repeat customers, it adds up to a better overall value.

John Jantsch is a marketing consultant, speaker and author of Duct Tape Marketing and The Referral Engine, and the founder of the Duct Tape Marketing Consultant Network.

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