This is a fundamental marketing question, and one I get time and again: How do we budget and spend for marketing, particularly when limited dollars are available? I could write an entire chapter of a book on this (and may soon do so).
Every client I have worked with has a limit to their funds for marketing. Of course, it never seems to be enough from anyone’s perspective. But, all the same, I can name plenty who have adequately and realistically budgeted, accounted for and successfully spent their marketing dollars to positive outcomes.
Generally speaking, following is what I have advised such clients. I will briefly explain each.
Think bigger. Don’t limit your marketing to media, in its traditional sense. People immediately equate marketing spending to media. What if you could spend your marketing dollars in a way that would mean reaching your target, but not having to dump lots of dollars on big media? Marketing is also promotion, incentives, rewarding loyalty, creating positive experiences, enhanced service, direct communication with the customer, sales, relationship-building. Again, think bigger and think how you can most efficiently impact customer conversion. Be dramatic. If you need help, bring someone in from the outside to challenge your thinking. None of this has to be expensive, just effective.
Build the cost of marketing into your product or service. It’s too easy to say, “we’re not spending enough on marketing.” I would never presume this. However, if you’re not building marketing into the cost of your product or service, you’re not being fair to yourself or your business. Why is this important? Because “if you build it, they will come” works only in the movies. Drawing customers (large or small numbers) to your service or product is an inherent part of selling. You’re either generating such attention yourself or drafting off of something else. Either way, resources (usually in the form of people and money) need to be allocated for such activities as a part of the cost of the product or service.
Target by knowing your best customers inside and out. You don’t have to speak to the universe. Just speak to your universe. Focus on the potential (and essential) few with the highest chance for conversion. Budget and spend your marketing dollars with them first. Then, migrate out from there. If your target audience is too big, you probably don’t know enough about them. Look, listen and learn in order to segment. It is well worth the time.
Focus on behavioral change (not attitudes or awareness). Forget consideration sets and good feelings about your, brand, company or product. If you have very limited marketing dollars to spend, these are not your biggest issues. Focus on differentiation, an emotional hook and getting the customer to act. Demonstrate to them why you’re better, engage them in an emotional decision and call them to action. I’m not talking about cheesy or cliché come-ons, here. I’m saying, be dramatically and truthfully different in a way that convinces your customer to give you a try. Attitudes follow behavior.
Treat marketing as an investment (if you want a return on it). Biggest mistake by some marketers today is throwing around the term ROI (return on investment) in conjunction with their marketing spending, while treating it as an occasional or periodic expense. This is hypocracy. If you want long-term, sustained ROI from your marketing, treat it as you would a true investment (in your product, service and business). The “I” in ROI stands for investment.
Allow a strategy to lead your thinking and subsequent spending. Thinking efficiently and with reverence to clearly defined marketing and busines goals will help you distill your message, promise and communication with the customer when you are ready to determine how much to spend and where to spend it. Speaking from experience, the practice of strategic thinking takes a load of time and guesswork away from determining where to best spend dollars.
To begin with, zero-base your budget. If you’ve made it this far and are still listening, then a zero-based marketing budget should come as no surprise. Your strategic goals, business and markeitng objectives will lead you to tactical media spending. Start from scratch so that your spending matches that of what you’re wanting to accomplish. Don’t simply rely on last year’s budget, plus or minus three percent. If the same old thinking isn’t quite getting you there, take a little time to start over. You’ll be amazed at how focused a budget it can yield.