I’ve spent most of my career working for large organizations so developing and managing budgets is second nature to me. In fact, I *like* budgets — they provide both a planning guideline and a framework against which decisions can be made. In my case, those decisions have generally been related to marketing expenditures. Given a certain organization goal, and considering past activities and their costs, how much do I think I will need during the subsequent year to meet or exceed those goals. I like looking at and considering data this way and I like having a benchmark against which I can measure effectiveness of my marketing expenditures.
But, to my surprise, as I’ve started working as a consultant with smaller organizations, I’ve discovered that many don’t have budgets. Some are even very proud of this fact and point to it as a benefit of being a “small business.” Okay… Maybe it’s because I’m a proponent of planning and strategy, but I believe that businesses of any size should have a budget for all of their activities and that the budget should include both projected earnings as well as anticipated costs. Recently I was asked by a client for some recommendations about how they could/should create a budget. Here’s what I suggested:
First, as I already alluded to, *do* have a budget. A budget not only helps to provide some direction for your marketing activities, but can also serve as a useful benchmark as you move forward against which to compare results – with goal of continually driving down marketing costs as a percentage of revenue!
Second, *have* some specific goals/objectives in mind. What are you hoping to achieve through these efforts? These don’t have to be ROI goals – in fact, initially, marketing goals are often related to things like generating awareness, preference, etc. (I just wrote another blog on this topic, in fact.)
Third, don’t overlook the “cost of time.” Social media has had a significant impact on marketing activities and, like traditional PR/media relations activities, is also considered to be “free.” It’s not – time is an investment as well and social media, in particular, can eat up a lot of time!
Finally, have a plan. I’m a huge proponent of planning for everything from large initiatives to small, including marketing communication plans. Know who it is you wish to reach, what you hope to have them do, think or believe, the communication channels that are most likely to reach them at a point in time when they will be attentive to your messages, the messages you will convey and the outcomes you’re hoping to achieve. The timing of messages and media outlets is also important. It takes more than one message hitting a target audience one time to make an impact. Carefully planned campaigns can achieve exponential success.
Given these “challenging economic times” (when is the last time you heard *that* phrase??), how can organiztaions produce better results with a smaller marketing budget?
My best advice here would be, again, to think strategically about marketing expenditures. Don’t just spend money on advertising in the local paper, running billboards, etc., because the competition is doing that. Don’t just use traditional media because it “seems like” the right thing to do.
Have a thorough understanding of your audience – the *actual* decision makers (e.g. if you’re in health care, the companies that select health plans that offer access to your services, primary care doctors that will influence referrals, etc.) and how you might impact their decision-making. And do think about how PR/media relations and social media could bolster your marketing efforts, again in strategic ways.
Budgets matter and can be well worth the effort to develop and use as a framework for all of your business activities. Whether you’re starting fr0m scratch, or using previous years’ activities to guide you, take a step in the right direction by putting a stake in the ground to indicate how much you want to spend to achieve specific, measurable, results.
Tags: Advertising, budget, economy, Marketing, ROI, spending, Strategic Planning