Marketing Budgets – Not such a black art!
29th January 2011
Or maybe you are just starting the planning process for the next financial year?
With all expenditure under the microscope, how do you ensure that your marketing budget is planned and spent wisely to generate the maximum return on investment? Here are some top tips for 2011.
First of all start with a clean sheet of paper, resist the temptation to start with last year’s budget.
Think about your headline objectives, and make a broad allocation accordingly. For example, if you wish to focus on developing 50 per cent of new business from existing clients, then around 50 of the budget should be allocated to client facing activities rather than prospecting.
Make sure you have a system to measure enquiries, whether by telephone, email or referral. Receptionists usually record all incoming calls, so they just need to record one more valuable piece of information “Where did you hear of us?”
Via your new client reporting, you should be able to track your conversion rate – the percentage of enquiries that sign up to become clients.
For example Yellow Pages can be a huge item of expenditure. Do you know precisely how many clients you receive from this each year? How does the cost per client from Yellow Pages compare with the cost per client from pay-per-click, the annual golf day or referral fees, if paid?
Armed with this information you will clearly be able to see which marketing activities yield the most enquiries and which of these translate to the most lucrative work.
Both measures are important, as a high volume of low value web enquiries is not as attractive as a small number of say high value referrals.
Identify the three main activities that must happen this year and make sure that they are funded accordingly.
Make sure departments back up the budget requests with a clear plan, dates and responsibilities – one page should suffice.
Set policies against which you can assess opportunistic budget requests during the year. This will help to deflect those persistent advertising sales executives.
Try not to fall into the trap of spreading a limited budget amongst too many for the sake of fairness. A ‘spray and pray’ approach will achieve little if resources are spread too thinly.
Keep it concise. A one page A4 spreadsheet with 12 columns (one for each month plus total) with rows for each activity is easy to monitor.Back to Blog
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