White papers and opportunity cost have a link marketers should know. As a professional white paper writer, I take pride in knowing how to do many things, but I also recognize that performing many of those tasks isn’t the best use of my limited time.
Understanding white papers and opportunity cost
It goes back to that concept I learned in an Economics class called “opportunity cost.” The simple definition of the term is what you give up when you make another choice. For example, let’s say I could earn $200 an hour by writing something for a client. Let’s also be optimistic and say replacing a broken faucet would take me six hours (which includes the two inevitable trips to the hardware store for critical tools and missing parts). So spending six hours playing plumber would cost me $1,200 of potential revenue. That’s my opportunity cost.
Now, suppose my plumber charged me $250 to replace the same faucet. If I let him do that, my net income is $950 (the potential revenue less his fee). So paying $250 instead of losing $1,200 is a better deal for both of us.
Opportunity cost can be difficult to grasp
Opportunity cost is a tough concept for many people to grasp. Even among those who understand it, it’s a difficult one to practice, because people believe they’re saving money when they do things themselves. They may save a little, but they lose the value of their time, including the opportunity to use that time in more productive and profitable ways.
Each of us gets only so many hours each year. We spend a quarter to a third of them in bed, then divide the rest between work and our “free” time. In a typical job, we’ll spend 40 to 50 hours of each week working and most of us pack a long list of tasks into that time.
You (and your team) are probably using your time most efficiently when you use it to do what you’re best at. That’s why most companies prefer to have their employees working in specialized roles. You don’t expect your sharpest sales rep to balance the books, too. Generally speaking, specialization increases efficiency.