We’re pulling inspiration from the silver screen to set the tone for this post. The Greek American actor John Aniston hit the target mark with this piece of advice:
This is a business. Be smart. Choose Wisely.
We assume Aniston had film choices and box office potential in mind, but for those in marketing, this advice deserves two thumbs-up.
When budgeting for a marketing program, it is easy to become sidetracked by the availability and popularity of new tools, platforms, online and offline tactics and channels. Before you dip into the sea of possibilities, there are basic considerations to keep in mind to ensure your program is effective and delivers a return on investment.
- There’s no chance of success if you don’t invest. In a 2012 Bank of America report on small-business owners, nearly half surveyed indicated that marketing was a leading top priority. While many small-medium size business owners have limited resources (time and money), goals such as creating the brand, a great website and determining the target audience must be part of the budget. You can easily undermine your performance as well as competitiveness, without adequate alignment, investment and capability-building. Here’s a real business owner’s take on the importance of a marketing budget, courtesy of Allbusiness.com :
- Set the bar early and develop your company’s standard of measurement and benchmarks. The tactics and channels you deploy must be united in ROI – return on investment.
- Focus on the market. Know their personas and wants. A good rule of thumb is to put most of your efforts into the twenty percent of customers or clients who provide eighty percent of profits. Remember that it costs five times as much to sell a new customer as an existing customer.
- There’s no one size fits all solution. Most businesses establish the marketing budget on the premise of percentage of revenue, some attempt to copy their competitors and others simply set a flat dollar amount on what they can afford. We recommend using the objectives in your marketing plan to determine the marketing budget. This method allows you to estimate the expenditures needed to achieve the marketing objectives. You may be limited by available monies, but this will force you to revisit your plan to make adjustments in strategies and tactics.
- Be Proactive. Establish a formal marketing budget for the beginning of your fiscal year, every year. Monitor your costs and results frequently and be prepared to make changes commensurate with the growth or decline of the company.
- Be Realistic. A marketing program takes time to achieve the greatest results and requires consistency, repetition and sustained contact. If you have yet to join the club of global brands, be patient. Most marketing activities need a good solid year to produce results.
What is your marketing budgeting approach? What are your priorities? Share your thoughts and take part in our marketing budget allocation survey.
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