Over at my other gig, I recently wrote an analysis of Abbott Labs. Buried in that piece, I said:
Abbott is one of the few companies whose sales and marketing divisions are actually becoming more efficient. Its SG&A dollars generated $3.56 in revenues for every dollar spent last quarter, up slightly from $3.55 a year ago. That’s one of the highest ratios in the business.
It’s true, I’ve finally found a company that seems to be getting more, not less, out of its marketing dollars. Here’s a couple of charts that graph the ratio of SG&A to revenues and gross profits. The second chart shows the growth rate in that ratio. As you can see, both sets of lines are drifting gently upward, unlike every other company I’ve looked at this quarter.
For examples of companies that have somehow not gotten their marketing expenses under control, see my previous chapters on: