MBA2381 Q&A Wednesday: Should I give my team a raise or invest in marketing?

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So.

So just keep this in mind. It's a little bit more of a commitment to where you're putting your profits. Next, I want to address this idea of like, hey, just spend money on marketing. Make more money for your business than you can spend on your team. Well, that's not really how marketing works. Marketing is one of those things that when you spend, you make, but when you don't spend, you don't make. Meaning if I run Facebook ads to an offer, some of those ads will convert and I will make sales. But once I stop running those ads, I will not have the ability to make that offer through, through that audience so I can make money. And then once I have it, if I don't continue to spend money on marketing, I won't continue to make that money every single month or every single interval, whatever it is. So I can't rely on that money coming in all the time to pay my team. Now, obviously there's a lot of different kinds of marketing. There's ways to grow your email list so that you can be able to nurture that list and sell to people later on. And that's a good roi. There's paid ads, there's sponsorships, there's a lot of different ways you can market and spend your money. But generally speaking, when you stop spending money on marketing, you stop getting the sales from marketing. Now if you do marketing for long enough, I'm talking about years, then you build a brand and people start understanding who you are. People know who you are, you are a name in the industry and that long term investment pays off and people will just buy because they know who you are. That brand affinity becomes a byproduct of all that marketing for years. But this is not applicable in the case of, hey, I'm going to spend the next year in marketing versus the next year on salaries or raises in this case. So let's make sure that's clear. Let's talk about the salaries part and the raises. I'm a big believer that you should always reinforce good behavior. Positive reinforcement is very, very strong. And one of the best ways and the most important ways team members, employees feel recognized is with time and money, meaning time off and their salary. Yes, there's other ways you can reward them. Recognition, titles, rewards and all that stuff is great. But the strongest one of them is how much money they take home and how much time they have off. And that's why they always say, don't mess around with those two things with team members, right? Don't mess around with their time off, don't mess around with their salary, make sure that they get paid on time. Make sure that they have their time off as allocated. And I'm a believer of this. But I'm also a believer that raises really don't have value and they don't actually serve you if everybody gets the same raise. In my opinion, raises increments should be based on performance. The better they do, the better they hit their KPIs or key performance indicators. The better they deliver on their promise as an employee, the more they should be compensated. It's simple as that. And if they don't do their job properly or they don't do it at a high level, they shouldn't be compensated. They shouldn't be given raises until they earn it. You have to earn your keep, otherwise it has no value. Now this is outside of inflation raises. You know, you know a lot of companies they will give an increment because you know there's inflation. That happens in the economy. We do this and that's why our increments are a range of percentage starting with some percent of raise. So if they're not doing so well, then they'll get the lowest percent raise just to cover inflation. But if they do great, they get the higher end of the range. Having said this, you don't have to give raises or the same amount of raises to everybody on your team. Do the maths and see how much would you give actually if you did it based on performance. And you'll find you might be able to afford to give the right people the raises and have some money left over to spend on marketing as well.

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Now here is my just straight up advice. If you're not spending any money on marketing right now, I'm talking about $0, you need to be spending money on marketing. Marketing should be a line item in your business all times. Whether you're using organic ways. SEO, email marketing. I'm not saying you have to spend money on paid ads, but you have to spend money, you have to invest in some form of marketing. Whether it's hiring an expert to help you with SEO or with your email growth or with sponsorships or whatever it might be. The point here is that if you're not spending on growth or marketing, then you're asking for trouble. You just can't continue to survive without bringing in a steady stream of new customers. And you got to start building on that brand affinity we talked about. So you should budget some of that profit to marketing if you're not spending any money on marketing right now. And then if you have some money left over, let's say 30% of that budget, look to reward even with one off bonuses to people that are doing well in your team. They don't have to have a raise. You can give them a little bonus until you can give them a raise. Once you start growing your business to start making more sales and more profit from the marketing efforts you're making. This is what I would do if I'm starting out and I am not spending any money on marketing right now. It's important to reinvest in your team and to reward people for those who are who actually need rewarding, that actually are doing a great job, that are a players on your team. You want to keep them, you want to nurture them, you want to make sure that they are happy so they stay with you and you can continue to reinvest with them. That's why if you make any kind of effort with a bonus, again even just one off, that's better than nothing. Or if you could budget for the rest of the year a raise for a certain number of people, that's great as well. The point here is that maybe you don't have to choose. And I say this because a lot of people don't do the math, sit down, do the math. See how much it's going to cost you. See how you can break it down, how you can distribute this funds. How much can you spend on marketing versus you know these types of rewards for your team, financial rewards, so that you know where you stand financially. Now if you are spending on marketing and just trying to put more fuel to the fire, that's great. But maybe you don't have to put so much of the profit into marketing since you're already spending on marketing. So maybe you want to go 50, 50 split or 30, 70 split. 70 being the team members now, it's Time for you to start rewarding all the hard work. One of the things I would advise is to actually talk to your team members and say, hey, we made a bit of Prof. It. I'd like to reward those who are doing well. Talk to those people that are doing well. Tell them what you want to give them. Just communicating it to them makes a big difference. Letting them know that you're making a conscious decision to reward these people and tell them, hey, you deserve something because of your hard work, because of your results, because of what you've accomplished, because of your review was excellent. You went above and beyond what you're supposed to do. Even if that reward doesn't kick in into next month or a few months down the line, communicating your intention will allow you to garner some good credibility and get them motivated. This is good news. You should share that with your team and capitalize on that. Emory. I hope that helps. I hope this answers your question. Hey, if you're listening right now and you've got a question you want to ask, go ahead and email me@omar mba net. I'll make sure to answer it right here on Q and A Wednesday, if you haven't already. Leave us a rating and review. Whether you're on Spotify or Apple Podcasts, go ahead and let us know what you think of the show. I read every single review, so it means the world to me to hear from you and know what you love about the show the most. Mention your favorite takeaway or favorite episode. I'd love to hear about it. Before I go, I want to leave you with this Reinvesting in your business is essential if you want to continue to grow or even just stay competitive and stay alive. Pocketing all the profits might seem like a good option, you know, at the start, but you gotta feed the goose that lays the golden eggs so it can continue to feed you and your family. Thanks so much for listening and I'll check you in Friday's episode. I'll see you then. Take care.

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