You Just Haven't Earned It Yet Baby...

Or to put it another way "you have got to make it before you can spend it".

Back in the dog days of 03-04 we had to deliver some heavy medicine to our employees. A necessary part of the turnaround. This required a long and difficult negotiation with the representatives of a Trades Union. But we got there. Got the agreement we needed and we all moved on together.

Less than 6 months later the man from the Union was back.

"I think its about time you gave my people a pay rise." He said.

I picked myself up from the floor.

"You are the same person who sat across the table from me just a few months ago?" I asked.

He confirmed he was.

"Then you will understand that we are in no position to discuss this". I may have been more blunt than this but, regardless, he got the point.

We then sat all the team down and gently explained that a business is just like your personal bank account. Every month the money you earn comes in and the money you spend goes out. If you consistently spend more than you have coming in you end up in the mire, up to your eyes in debt repayments and interest charges you cannot meet.

"We have got to make it before we can spend it" I explained. "And we just haven't earned it yet."

They understood. They may not have been over the moon about it but they understood. And the vast majority of them stuck with us and remain with us to this day.

When we had made a profit we paid some rewards. Not before.

Seth Godin wrote an excellent post along these lines on Monday "The marketer's guide to personal finance" although he talks mainly about personal finance rather than business the lesson and the rule is the same. As any regular reader of my musings will have gathered, I am a regular reader and quoter of Mr Godin's work. This post is a great example of why. It fits my mind set of Marketing is Business and Business is Marketing.

I have known many Marketers over the years who think the definintion of Marketing is "Spending the Marketing Budget" and little more. I see Marketing as a total business approach. I accept that you have to make it before you can spend it otherwise "You Just Haven't Earned It Yet Baby"...