Essential Elements of Effective Marketing on a Budget
Do you Have a Budget?
“Make sure your dollars are spent wisely. New businesses and established companies need to set different budgets,” states Entrepreneur.com
When I am meeting with a small to medium size business, 75% of the time the owner or marketing director does not have a budget. It’s ok if your budget is not in place or if needs to be re-visited, that’s why we are taking the time today. I often get the “deer in the headlights look” when I ask this question. Some of the most common answers I get; When it’s a good idea, we will find the money; There is not a set number we decide month to month.
One of the most important decisions that a Small and Medium-size Business (SMB) has to make is how much money to allocate for the marketing budget. Clients often ask, "How much should I spend on marketing?" The answer: "It varies by industry, life cycle of the business, business size and competition in the marketplace.” It is also based on how much you want to grow, and how fast. Both the Counselors to America's Small Business (SCORE) and the U.S. Small Business Administration (SBA) define the variable for a proper marketing budget to be between 2% and 10% of sales.
Most companies under spend on their marketing budgets, thinking that to not spend is to save. This quite simply isn't true. You've heard it before: You have to spend money to make money. The trick is to spend your money wisely on a tailored marketing plan aimed at fulfilling your company's goals.
Two main areas that should be reviewed when setting a marketing budget: the development or refinement of the brand (logos, custom web design, videos, blogs, e-mail campaigns, brochures) AND then the ongoing expense of promoting and advertising your brand to your customer base and your prospects (social media, SEO, print, tv, radio).
Develop a Budget:
However, when you’re just getting started, your previous year’s sales may be non-existent or they may reflect how few people knew about your business during that time. Most companies struggle through the first few years, and part of that struggle comes from balancing the financial limitations of being a start-up with the need to market your products and services to your target audience.
If your business is new or currently reinventing itself, you’ll need to think about marketing on a wider scale. We often help our clients set a budget by using goal based marketing. This involves asking some important, tough questions. What is the amount of your average sale? What is the total dollar amount spent by a customer over the course of a year? How many new clients do you need in order to make next year a success?
Return on Investment
“Marketing is a key cost of doing business, and if you base your efforts on leftovers, you’re likely to be left behind by the competition.”
You must be prepared to invest in your marketing efforts. Think of your marketing budget similar to a high interest loan. In the beginning, you are paying almost all interest – AKA marketing and advertising expense (business cards, website, content marketing/advertising, local business organizations, and networking groups) as time goes on and you stay consistent in your efforts, you begin to see the return.
As you see in the graph, you are now paying less on interest – aka advertising cost. You have made the initial investment and reached “that new customer” and over the life of the client you are now seeing the results from your marketing efforts and seeing profit from the customer.
So now that you have a guide for your budget, who are you going to market to? You must know your audience – how do you figure that out? Look at your current customer base. Why do they buy from you? Look for common characteristics and interests. Which ones bring in the most business? Don’t forget to ask for testimonials, this will help you later when you are crafting your message. Happy clients are willing to share their positive experience BUT you need to ask.
Do You Know Your Audience?
Surveys are tremendously helpful but you may not have those in the beginning, so you must look at other ways. Check out your competition. Who are your competitors targeting? Look past that market, you might find a niche market that they are overlooking. Choose specific demographics to target. Consider the psychographics of your target. Determine how your product or service will fit into your target's lifestyle.
What are the ways you market to your audience?
BRANDING MATERIALS. The foundation of your brand is your logo. Your website, packaging and promotional materialsall of which should integrate your logocommunicate your brand. Add personality by using photos of you and/or your staff in your promotional materials. Did you ever think of providing a business card for ALL employees? This is a tiny investment and they’ll be proud to leave their card with every customer, prospect, with friends and relatives and your name will be in many more places.
CUSTOMER SERVICE. Did you know you spend less advertising and marketing dollars with current clients? You can accomplish this through customer service. This insures a longer life of your client base. Good customer service is the lifeblood of any business. A few ways you can do this is create customer survey, send branded Happy Birthday or thank you cards, promote trends or current events driving home you’re an expert and credible in your field.
MEDIA VEHICLES. Use advertising mediums like print – magazines, direct mail, radio, social media, billboards, television/cable. Here are some MUST DO’s when you do advertising.
1. You must be committed. Commit the money and leave it alone. Plant the seeds that will grow later. Most marketing plans take time to produce even minimal results. Be patient, your efforts will pay off in the long run.
2. You must be consistent. Why do you see that one commercial over and over or you see that company advertising in print everywhere? The marketing message must be constantly reinforced. Your customers will forget you if they don't hear from you. It does really work. We have over an 80% renewal rate, with some clients with us since 2008.
3. Use One Medium To Direct Your Customer To Another. Once you pick your advertising vehicle please make sure you include your website/blog/social media. Ideally create action for a prospect to go your website for a more message controlled atmosphere. If you use only social media as your advertising vehicle push them back to your blog or website where you can engage more thoroughly. Customers primary reason to go to websites are to be informed about your product or service. So put your WEBSITE EVERYWHERE.
4. Lastly, BIGGER IS NOT ALWAYS BETTER. This goes back to consistency. Should you use your limited advertising budget to create larger, more visible ads that restrict you to advertising less frequently, or smaller, less visible ads that you can then afford to run more frequently? More frequently is the answer. Most people don't respond to ads the first time they see them, they need to see the message a number of times before they take action.
IT’S ALL ABOUT THE MESSAGE
THE 80/20 RULE is a formula for creating an effective marketing message. Most small businesses are confused about their marketing message. Some think it’s their slogan and others think it’s a regurgitation of all their awards and how long they’ve been in business. Still others think it’s their vision and mission statement. It’s none of the above. Your marketing message is what grabs your prospect’s attention, tells them how you can solve their problem, why they should trust you, and why they should choose to do business with you over others. It SHOULD BE What’s-In-It-For-Me, your marketing message should “speak” to your prospect. This is done by appealing to your prospect’s “hot buttons” that trigger an emotional reaction. OUR RULE – 80 percent should be informative and educational about your product or service and 20 percent should be about you -your bio!
Today more than ever you must have the essential elements to effectively market….create a flexible budget, understand your audience, engage your prospect and provide credible content! You need to capture their undivided attention. Your marketing efforts must not be an interruption, but an integral part of the learning experience. Consumers want to be educated before they buy. Content builds loyalty, credibility, and trust.
If you would like to learn more ways to craft your message, to engage a female consumer to move to an action, contact me to set up an appointment to review your marketing budget and your strategy to implement one of the essential pieces to your marketing plan – CONTENT and PRINT!
Areas of Expertise: Marketing, Content Advertising, Connecting, Brand Management