Tips on Developing a Marketing Budget
By Rodger Roeser, CEO, The Eisen Agency
Creating a marketing budget can be one of the most daunting and insecure moments in the life of a business owner. How do I know what to spend? How do I know where to spend it, or what to spend it on? What if it doesn’t work? For the majority of business owners in the small business base, this is an area of expertise that you almost always should consult a strategic marketing firm or counselor if you feel uncomfortable doing the planning phase. A good marketing consultant will surely save you time and dollars, and direct you toward strategies and programs more likely to succeed – as a good, experienced counselor should know what will and what won’t work.
You can expect to pay between $5,000 and $15,000 for this type and this level of work, but it’s a smart and advised investment if marketing isn’t necessarily a core competency. And remember, there are two “worst and worster” things you can do with your marketing dollars – don’t market at all or just wing it. My absolute best advice is hire a professional agency, but if you insist on doing it yourself, here’s some tips to make sure you’re getting the most for your hard earned dollars. Think strategically before you think tactically.
1. Take Inventory
Gather all the materials you’ve used and have been using over the course of the year or so. Ads you’ve purchased, press announcements you’ve made, social media, trade shows, events – anything that you have spent dollars on in the marketing of your business. Take a look at what each cost and how you feel each performed in doing what you wanted it to do, and remember, putting out a press release isn’t designed to triple your business so be honest with yourself based on the tactic you chose, i.e.: develop leads, share some good news, gain exposure and the like, and attach a value between 1 (stunk) and 5 (worked perfectly) to each one. Were the items professional developed and designed? We’re they clearly written, with clear calls to action, and so forth. Once you have all your “stuff” decide what needs improved – for example, more frequency of this, better designed that, and so on. Now you know what “stuff” you need.
2. Competition is Key
Take a good look at your direct and indirect competition. What is in the way of your business adding that customer or why won’t they try you out. What is your competition doing that you’re not. What is their traffic on Facebook or LinkedIn? Do you see them mentioned in the newspaper often? Are there ads more frequent than yours or better developed? Do they do something creative that helps them build their business, such as earning local awards or hosting events? As you understand your competition, you can then look at ways to stand apart from them and invest your marketing dollars in areas where they may not – the riches are in the niches – so don’t be afraid to cater to a specific group. Don’t copy your competition, understand them and communicate why you’re better and share those benefits.
3. The Target Audience
Speaking of which, who you share that message to – your target publics – is obviously critical. And this target varies wildly depending on location, business type and literally dozens (or more) other variables. So, take a good look at your existing customers or clients and those you would like to add. Be brutally specific in creating a profile for your target public because that allows you to stretch your marketing dollars because you’re pinpointing exactly to which public you wish to relate – and your dollars can be invested in this group. Make the profile as specific and detailed as you can, for example: women between the ages of 18 – 24, income of $100,000, within a 10 mile radius of our restaurant who own their home and are single. This allows you to market in the right places and with the right type of message that would resonate to this type of individual – obviously, each business type will have to determine its own profile.
4. Be Smart
Remember, if you decide to go it alone without agency support, you’ll need to work with the various advertising representatives of each type of media and medium you are considering. So, when working with these ad reps, be mindful that they have a quota of sales to make and they are selling their specific outlet and medium with that outlet and medium in mind – they are not objective counselors – they are salespeople. There’s nothing wrong with that, and they’re certainly not bad people, but they are there to sell you their product, not what will necessarily be the smart marketing investment. Also, keep in mind the price of things varies wildly, so have some idea of what “things cost” before contacting them. Much information on the costs of basic tactical marketing purchases are available online.
5. Rule of Thumb
In many cases, you can determine your annual marketing budget with a relatively simple formula. Take your annual gross revenue and multiple that by a low of two percent and a high of 10 percent. This is most likely the range for your business – although my firm would be able to give you an exact percentage. Based on this range, one being the least you should invest and the other being the most, you now can start to look at your inventory of what you need (new collateral, a refreshed website, better ads, more media relations) and call that your foundational expense. As you look at proactive spend, it’s smart to focus on single areas and single mediums at a time, so look where your competition isn’t and consider going there – and don’t just rely on old print ads. Radio, online, sponsorships and events can be excellent tactical investments.
6. Moving forward
And, this year, benchmark all your numbers right now, this month. Take a look at all the things you want to measure – website traffic, social media traffic, turn, butts in seats, votes, sales of widgets – and set a benchmark. Then, each month, based on the marketing work performed, measure that benchmark number to growth and divide by your monthly marketing spend. While rudimentary, it will help to give you something resembling an ROI.
Rodger Roeser is the CEO of Greater Cincinnati’s premier marketing, branding and public relations consultancy, The Eisen Agency. His firm specializes in developing leading and proven marketing and business strategies and tactical execution for small to mid-sized businesses across the country. More information can be accessed at www.TheEisenAgency.com.
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