It’s time to plan and put together the marketing plan and budget. While you may be trained in the latest technologies, processes and equipment, chances are you don’t have any formal education in the latest marketing trends and techniques. This reality has led to many firms that have never budgeted for marketing expenditures to struggle when tracking their return on investment and haphazardly responding to marketing opportunities. So, where should you start?
Experts state that 5 to 7 percent of your total company revenue should be spent on marketing. Properly budgeting for marketing is a large task, but can provide tremendous dividends and ensure your company is not left behind as competition continues to increase.
The reason typically cited for not having a marketing plan and budget in place is lack of time to prepare them. Too often, when tasked with assembling a budget, businesses estimate their overhead, salaries and then their gross profit. Anything left over is fair game for technology upgrades, capital expenditures and marketing. However, this method does little to correlate the tactics needed to fulfill your marketing objectives in order to support your sales or branding goals.
Setting budgets should really be more about market opportunities — identifying the target audiences you need to reach and the anticipated cost to reach them. By determining this number — a number that’s realistically tied to your objectives — you can lump it in the budgeting process from the beginning and treat it with the importance it deserves.
Further, with this approach, you have the opportunity to develop a baseline to present in defense of your marketing goals. This baseline serves as the means to identify the mandatory elements of the marketing plan that simply must be funded, allowing for choices on other tactics to be made based on desired results, not merely dollars.
Begin by identifying what you need to do to accomplish your sales goals in support of your business plan. This involves identifying between three and five major goals and outlining the tactics needed to create success. Only identify reasonable, tangible tactics that can be considered not only in terms of dollars and staffing, but also your corporate culture.
For example, if improving customer satisfaction is a goal, outline how you’re going to measure that goal, beginning with an assessment of the current satisfaction level. Also outline the steps you’ll take to improve in this area and come up with a means of measuring satisfaction at the end of the year. Then, conduct a gut-check on all tactics by reviewing whether or not execution is probable.
Too often, ideas presented in the marketing plan are solid ideas that have worked for others, yet they simply don’t fit your corporate personality and won’t work for you. For example, a marketing plan calling for your CEO to personally visit each client with the hopes of improving customer satisfaction is a solid tactic. However, if the CEO would prefer to stay in the office and leave the customer contact to the project management and sales team, adjust the tactic to better reflect your corporate culture.
Probably the most overlooked means of saving money in the marketing budget is the opportunity to collaborate. Although we’ve heard this suggestion before, few firms take advantage of the chance to share in marketing expenses with other members of their team.
Begin by looking for ways to collaborate with your vendors, associates or other members of your project teams through joint sponsorships, co-op advertising or even shared marketing staff. One example that’s easy to implement is project photography. If all members of the team were to share in this expense, all would benefit with professional images that can be used for marketing efforts at a reasonable price.
This effort also could extend to award submissions, product press releases, event sponsorships and joint presentations at association meetings. Be creative in your approach and conduct a brainstorming session with key members of your team to identify other ways to share in expenses.
Knowing when to outsource
Another key component of your marketing budget is outsourcing — deciding what internal resources will manage and what outside experts will manage. Unfortunately, many overlook this expense when budgeting so key tactics remain untouched because realistic expectations with regard to resources weren’t allocated. Many argue that outsourcing marketing activities and strategy is smart as it allows you to benefit from an outside expert’s opinion.
Let’s begin with the selection process — a scenario we’re all accustomed to, although we often forget our key selling attributes when we’re on the other side of the equation. The secret to success clearly lies in selecting a consultant that matches your needs and with whom you can build a relationship.
Because not all marketing and advertising agencies are the same, it’s essential that you match your need with the core services and expertise of your chosen agency. For example, most full-service marketing or advertising agencies will work with you on branding efforts; create marketing, sales and advertising materials; and handle website development and electronic marketing.
Contrast these services with a graphic design or web design firm, both of which may or may not possess any copywriting expertise. And, while some agencies offer public relations services, others specialize specifically in publishing, technical writing and the PR process. Still others focus on market research, telemarketing, trade shows, specialty giveaways or event planning.
Many of the firms I know that feel they got burned by outside marketing consultants were quick to explain that the firm they hired had a great track record in one service, such as brochure development, but just couldn’t cut it for other services needed. Further, it’s essential that your chosen marketing firm understands your industry. After all, why would you trust your marketing and branding efforts to a firm that knows nothing about concrete?
It’s also important to fully understand how your consultant charges for services.
Experience has shown those who fail to plan, especially when it comes to marketing, often fail. At the very least, they probably spend more money with fewer results because of last-minute marketing programs and rushed implementation strategies.
Although marketing plans, by their nature, will be modified throughout the year, the effort of budgeting based on actual goals, tactics and means to measure results helps guide efforts and increase the probability of success. Diligence in marketing planning and budgeting results in knowledge. And though results aren’t guaranteed, the knowledge of where you’ve been and where you’re going is priceless.