Marketing on all cylinders
To be effective, take your budget seriously
Effective budgeting for marketing is like driving a car, especially when it comes to using the gas pedal.
There is always a portion of business owners who are notorious for treating marketing budgets with disdain instead of confidence. This is because marketing is seen as a discretionary expense item when it’s really an operational investment.
Managing growth: Working with the right people and a dynamic approach, marketing dollars can literally be your throttle for positive results. Look at marketing budgeting like driving your car and using the gas pedal. In our analogy, gas = money.
Take a quick road trip:
1. When you start out, you hit the gas. (Robust brand identity and awareness campaign.)
2. As you get up to speed, you can ease back a bit but keep your foot on the gas enough to maintain a good cruising speed. (Product advertising and promotions for managing growth.)
3. When you see a hill coming, you get ready to give it more gas and then hit the pedal as you reach the incline, and more on steeper hills. (Responding to new competition, lower industry demand, recession, PR problem, etc.)
4. Once over the crest of the hill, you can ease off the gas, especially when going downhill. (Successful campaigns deliver positive and sustainable results.)
5. When back in the flats, more gas is needed to stay up to speed. (Competitive advertising and promotion to keep business steadily growing.)
In a highly competitive landscape, you need to spend more when revenues decline, which may seem counterintuitive but really isn’t when you think it through.
Avoid the no-go approach: I’ve often heard, “We’ll increase our marketing when business gets better and we can afford more on advertising.” Hmm … When is “when?” Worse, I’ve heard, “How about you put skin in the game and do our marketing upfront, and then we’ll be glad to pay you plenty when we make more sales?”
This kind of thinking is the very reason these businesses don’t have enough capital to respond to changing and sometimes negative market conditions.
Follow the leaders: Depending on your industry, you should be spending between 6 percent and 18 percent of total revenues on marketing. This is the spending range of the market share leaders in each industry. If you want to get business moving faster and in the right direction, get intentional and hit the gas.
Chuck Sink is owner of Chuck Sink Link, a marketing agency in Sunapee. He can be reached at chucksink.com