‘Tis the season.
The last quarter of the year is quickly drawing to a close. It’s time to create your marketing plan and budget for next year. And while figuring it all out can feel like an exercise in herding cats, taking a step-by-step approach will help make the task less daunting.
In fact, let’s make this as simple as possible with a 3-step approach.
STEP 1: ORGANIZE FINANCIAL INFORMATION
Every realistic marketing budget begins at the same place: Getting clear on your current financial situation. Estimating or guessing will not produce a solid and sustainable budget.
Start with identifying reliable gross revenue. “Reliable gross revenue” is the minimum amount of money your company takes in each month. For example, if your company’s 2015 gross revenue ranged from $5000 per month to $7000 per month, the reliable gross revenue for 2015 is the lowest figure of $5000 a month.
STEP 2: DETERMINE WHERE BEST TO SPEND MARKETING FUNDS
Three main factors contribute to how you spend marketing funds:
A. Budget Size
Great Marketing Can’t Survive on Leftovers. If your profit margins are relatively low because you’re a small business, a startup, or a business getting out of financial trouble, there may be a natural inclination to define your marketing budget as whatever is left over after other business expenses are paid. Understandable, but here’s the question you must ask yourself (and honestly answer): Does my product sell itself?
The answer is probably NO. Our products and services are like our children, thus the temptation is always to assume that they’re so good, they “practically sell themselves.” In reality, there’s no such thing. In order to sell with any kind of volume, you need to get word to your target market about how your product or service will benefit them. Word of mouth – valuable though it is – will get you only so far. Beyond that point, only a strong marketing campaign can give you the numbers that a great product or service deserves.
Many businesses allocate a percentage of reliable gross revenues – usually between 2-3 percent for run-rate marketing and up to 3-5 percent for start-up marketing. But the allocation actually depends on several factors: the industry you’re in, the size of your business, and its growth stage. For example, during the early brand building years retail businesses spend much more than other businesses on marketing – up to 20 percent of sales.
As a general rule, small businesses with revenues less than $5 million should allocate 7-8 percent of their revenues to marketing. This budget should be split between (1) brand development costs (which includes all the channels you use to promote your brand such as your website, blogs, sales collateral, etc.), and (2) the costs of promoting your business (campaigns, advertising, events, etc.).
B. Past Experiences
Beyond the limitations of your budget, you also need to consider the strategies that have worked in the past. For instance, if you’ve noticed that email newsletters helped bring in more clients, then you should do that again, even if you have the funds for more expensive alternatives. On the other hand, if half-page print ads in your area’s largest daily newspaper have driven sales better than the less expensive direct mail, be sure to allocate enough to print advertising.
C. Where You Can Reach the Right Audience
Back to those cats you we talked about earlier. They’re called marketing channels, and there are more than we can count, each with its own merits and drawbacks. Paring down the list into something more “herdable” is key to your success. The objective is to determine where your target audience is hanging out.
Begin by creating a detailed description of who your target customers are. Then think about what media they are consuming (e.g., what websites they frequent, what television programs they watch, etc.). This is where you should be marketing to them.
These are the six marketing categories we believe are essential to your success:
Branding. Including logo, business cards, letterhead, email templates, and additional collateral.
Website. You can use Wix or WordPress for a do-it-yourself website, which is free or nearly so. Or you can invest in a custom designed WordPress site that looks like your brand, adding a plugin shopping cart or other components to create the site best suited to your needs.
Content. Blogging should be guided by the goals of your overall marketing strategy. While a blog can be hosted at a separate, stand-alone site (Blogger, Tumblr, etc), we recommend that it be a page on your website, which is why we like WordPress. What you want is one place to capture potential customers, not force them to click through to another location to see your full website.
Consider, too, authoring white papers for your target audience to download, either for free or at a cost, depending on whether yours is a B2B or B2C business.
Social Media Marketing. Some companies assign the duty of posting to social media to a staff member or intern. Results will vary depending on whether the person has an understanding of social media strategy and not just tactics.
Advertising. The least expensive marketing is word of mouth which, while effective, is limited in scope. To get the most out of word-of-mouth, consider incorporating some testimonials into your ads.
For even broader market coverage, appropriate traditional advertising should be supplemented with digital advertising such as paid social media ads, pay-per-click ads on others’ websites, etc.
The differences between B2B and B2C companies can affect your digital marketing budget:
- B2B companies usually focus more on trying to market to top company officials. SEO will help search engines pick up on your site (so your website is more visible when decision makers search for your product or services), whereas business owners are less likely to use social media to influence their buying decisions.
- B2C companies greatly benefit from a strong social media presence because their target audience is using it every day. Of course, SEO, PPC, and content marketing shouldn’t be neglected, either.
Event Marketing. A full event marketing strategy consists of planning and hosting your own events (ribbon-cuttings, grand openings, workshops/seminars, galas, festivals, musical events, etc).
If your events budget is somewhat limited, consider cross-marketing with another brand that has the same target audience.
Attending and networking at trade shows, awards shows, association events, etc is a great way to leverage the crowds drawn by others’ events.
NOTE: In the 21st Century, Digital and Traditional Marketing Campaigns Go Hand-in-Hand. Although digital marketing should be given a large part of the overall marketing budget, don’t abandon traditional marketing tactics if they are working well. SEO, social media, online content, and PPC can work in conjunction with your TV commercial, billboard/newspaper ads, or event. After all, if your target audience sees an ad – whether it’s on TV, a billboard, or in an event program booklet – they often turn to a search engine to find your product. Digital marketing helps ensure that you’re highly visible when they look for you online.
STEP 3: ANALYZE RESULTS AND MAKE ADJUSTMENTS AS NECESSARY
The final thing to remember about building a solid marketing strategy is that it is a living, breathing thing. Conducting periodic analysis of the plan and making adjustments that improve revenue production is the key to success. Ultimately, marketing is designed to bring in extra revenue. If the strategy does not bring in new revenue in excess of the cost, then it is better to remove that strategy and try something else.
Evaluation begins with comparing past performance to the performance after a reasonable period of your marketing initiatives. Have revenues increased, decreased, or stayed the same? Be sure to take into account whether the changes were caused by your marketing strategy or by outside influences like holidays, seasonality, the entry or exit of a competitor in your space, etc.
For a comprehensive marketing strategy in 2016, don’t go it alone. Call WhiteHOT, Inc. We’ve been herding those marketing cats for over 20 years.
WhiteHOT, Inc. is led by owner Phil Clouser, a seasoned creative director with over 20 years in sales and marketing. Whether you’re doing a full-blown campaign or a single project, we do it more competitively than the big agencies. That’s the advantage of our streamlined, boutique approach. We are aggressive as well as responsive. We’ll meet with you, analyze your goals and expectations, design your project, and expedite it before the “big guys” assign a team and traffic number. Call Phil today at (609) 429-2972 to get the best value for your money, without the aggravation!