The marketing budget plan can be that singular factor that will drive more profits than most innovations in your company. Bold statement? The lack of innovation cannot be cited as to why 50% of businesses fail within their first 5 years of operation. And of those that do survive past their 5-year anniversary, an additional 80% of those will not make their 10-year anniversary.
Engines, Fuel and How They Connect.
I am by no means a rocket scientist. I’m not even that mechanically inclined. But I do know that an engine provides the energy to propel any vehicle and that that any engine needs fuel of some type to perform. Moreover, that fuel needs to be consistently transferred from the fuel storage source to that engine. This gives up three crucial aspects: The engine, the fuel to propel that engine and lastly, the means in which that fuel is transferred to that engine so that it can operate.
The Marketing Budget Plan
In marketing your business, so that it does move forward and evolve into a well-greased and profitable machine, I will use the following analogies:
Marketing: The Engine that moves the vehicle (your business)
The marketing budget: The fuel line
The money you allocate to marketing: The fuel
The marketing budget (policies, plans, programs, processes and directives that comprise it), is what connects the money you make from your business to the marketing that has driven your business forward, as well what will drive it even further. Just because a business makes money does not mean that it will transfer – via the marketing budget – to further marketing efforts. It is the well-followed marketing budget plan that connects your revenue to further marketing efforts and initiatives.
Allow me to add this one important proviso about your engine and marketing budget plan: Your marketing can evolve into a Willy Wonka-like engine which possesses impressive and magical powers. Because this magical engine called marketing can shift in sizes and powers, as well as grow in it’s capabilities, so can your entire business expand.
The Basic Elements of a Marketing Budget Plan
Step 1: Determine your branding as a company. I define branding as “Your Distinctive, Indispensable Attributes and Value.” Know who you are and enforce that message with design, packaging, a logo, colors, customer service, location, offerings and so much more. A great person to follow about branding is David Brier.
Step 2: Determine who your target market is and what they need and want. You want to develop a detailed and well-researched program that knows with certainty how this target audience lives, as well as knowing what are their ambitions, concerns, fears and goals. The more you know about their lifestyle, their needs and purchasing habits, the better you can align your brand to them as individuals.
Step 3: Does your first step, branding, align with what you found in the second step, research? If not, adjust accordingly so that your branding is attractive, interesting and fits the needs of your target audience.
Step 4: Develop the content that will communicate with your target audience. This includes understanding the contextual content that they will consume. In other words, what content do we send them that not only aligns to their needs and desires, but fits the channel in which we deliver that message. How one communicates on a blog on LinkedIn would be much different that how one communicates on Pinterest or even Twitter. Contextual marketing concerns itself with not only the right message to the right audience, but the right message that fits the channel in which it is delivered.
Step 5: Estimate the costs of your marketing initiatives. Include the costs of creative design for packaging, ads, websites and other collateral materials. Calculate the costs for your desired media buys, such as pay-per-click ads, industry papers or specific outlets that fit your demographics. Include expenses for direct mail, trade shows, press releases, and the cost of building and maintaining a website. Add up the total estimated costs. Determine whether you can afford the total price of your marketing plan. If not, review each category to see where you can cut back.
A crucial part of your marketing budget plan is stating in written policy, “How much of our income will we consistently, and without variation, dedicate towards our marketing programs?” I suggest 10-15%. Whatever amount you set, you must stick to this plan so that your marketing can sustain and make progress.
You want to set in stone a spending formula that ties your marketing budget to a percentage of sales. If your marketing plan is working, then the more you sell with it, the more you should consider spending on your marketing efforts. If your sales drop, then you can at least continue some marketing while you generate more income if you have such as percentage dedicated to marketing.
Step 6: Now write down an actual marketing strategy, as well as the tactical actions that you will take. Assign these actions to specific people, if you have a team of people, so that there is accountability. You want to now initiate these actions on a daily, weekly and monthly basis.
Step 7: Track the results of your marketing. Are more people visiting your website? Are you getting more phone calls and/or walk-ins? Are you generating more sales? It is vital that you connect the dots and ensure that your marketing is instigating more traffic, more inquiries and higher sales. Know your numbers and results, and adjust accordingly.
A Marketing Budget Plan May Be Counter-Intuitive
I have found that most business owners find a budget counter-intuitive and even restrictive. But in reality, what it does is bring up their responsibility and accountability. Developing a following a marketing budget plan allows one to become proactive about business. “Reactive marketing” is usually someone who attempts the latest tactics that align to nothing what the business is doing. Or, it reacts when times are bad and “something has to be done right away to save us.”
A marketing budget plan requires a different mind-set, that one of an entrepreneur. Entrepreneurs are proactive about marketing and know that marketing is not “an expense”, but a vital and vibrant business process that needs to be managed and fueled for their business to move forward and become more profitable. Those who work in their own business as an employee view marketing as a burden or “necessary evil” that they cannot confront. I can assist either type to help build viable and fun businesses.