The #1 Thing You Forget In Your Marketing Budget


Type “marketing budget template” into a search engine and you’ll find several examples, from the most basic to impressively detailed.

But 99 percent of the time there’s one important line item missing – your Cost of Occupancy.


Cost of Occupancy = Yearly Rent or Mortgage


Your yearly cost of rent or mortgage payments should be treated as a marketing expenditure.


You sell a product or service that relies on foot traffic. The better your location, the more visible you are to potential customers.

The more visible your location is to potential customers, the less advertising you need.

Location = Advertising


Therefore, your Cost of Occupancy should be designated as a line item in your marketing budget.

This allows you to analyze your current location in terms of marketing investment:

  • Am I in a location with the best possible return on investment?
  • What kind of signage is allowed (both inside and outside of the building)?
  • What is the drive-by traffic like? Is there enough visibility for daily commuters to notice my business?
  • How convenient is my location for potential customers (easy access, parking)?

Ideally, your location will offer the best visibility and access for the least amount of rent or mortgage payments.


Location = Advertising


Thinking about your Cost of Occupancy from a marketing perspective will rein in over-enthusiasm for luxurious space with poor visibility; likewise, it can shine a new light on a location you may have previously rejected – a space that needs work, but the location is priceless.

Give some thought to your current Cost of Occupancy in terms of marketing – how wise is your investment?

Next time, we’ll look at an easy way for any business to create a spot-on marketing budget.

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3 Responses to “The #1 Thing You Forget In Your Marketing Budget”

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  1. Dave Young says:

    AMEN! Tom and I had a new client last year who had been experiencing declining revenues for about 4 years in a row. As we dug deeper into the reasons, we found out that the decline had begun when they moved from a busy little shopping center into a stand-alone location that gave them more room for inventory, showroom, etc. But, they lost all that foot traffic….AND, they now had a big mortgage on their new building. Oops. It’s a difficult position. The move should have been analyzed more closely, taking into account the amount of traffic that was being generated by people who noticed them while shopping the other stores in the center. In theory, their new stand-alone location should have worked…it was on a very busy road (the same one as the center) but it was not where people stopped to shop. And, the lay of the land meant that their store is actually about 15-20 feet below the level of the busy street. They had put themselves in a hole…metaphorically, physically and financially.

  2. Well put! And sometimes that cost of occupancy isn’t even a STANDING location!
    For instance, I had lunch yesterday with the owner of a tour company that up until first of the year only operated walking tours with reservations made online.
    Then in January she bought a trolley, giving little thought as to how her business model needed to change as far as maintenance, parking costs when it isn’t running, marketing on the side of the trolley or external marketing, etc. Her initial concerns were only about getting drivers, tour guides and fuel.
    Now, it’s dawning on her that the old-fashioned trolley is actually a rolling location and that each time it is seen and interest is generated about the tours, info has to be made available for people to take the next step!

    Keep up the great work!

  3. It was either Drayton Bird or David Ogilvy who said: “Expensive real estate is the best advertising you can buy.”

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