Planning your marketing budget for the next financial year
EOFY is fast approaching and with this comes a heap of planning and budgeting. For this reason, it seems opportune to talk about the importance of creating an effective marketing budget and plan.
Creating a holistic marketing budget and strategy ensures your communications are affordable and can be directed to the right people at the right time through the right channels. Moreover, by strategically planning every aspect of your marketing efforts, you are able to set specific and measurable goals that form the basis for your strategy. In short, planning and budgeting offers the best opportunity for successful ROI.
Defining Your Budget
The very first stage in this process is to create a realistic picture of the current financial situation and more specifically, the amount of disposable income you have to play with. Creating a marketing budget on approximate figures is extremely difficult to do and has a high potential for overspending to occur.
Here are some super simple steps to work out your disposable income:
How much revenue is your business guaranteed to make in a month?
What monthly expenses must the business fund (inclusive of everything from rent to employee wages)?
Reliable Revenue – Expenses = Disposable Income
Create Your Marketing Plan
Now we know how much money there is to play with, the question then becomes where will you focus those funds? There are a number of factors that influence where your money will be spent most effectively, exemplifying the importance of research and planning. Obviously the budget is a major factor here but we also want to have a look at what our purpose of communicating is, who we’re actually talking to and when they’re most likely to be listening. Use the following as a guide to create your own marketing plan:
What are you trying to achieve?
What is your purpose for communicating? What is your ultimate business goal, your reason for requiring a marketing plan? It’s difficult to devise a plan of attack when you don’t know who the target is the first place.
Research and Analysis
What is your competitive advantage or unique selling proposition (USP)? What are the current and projected market conditions that may influence your strategy? Gaining a clear image of the market in which you operate is a critical step in creating a marketing plan; it allows you to compare yourself against your competitors in the scheme of the industry, identify potential opportunities and reduce risk to your business.
- Target Audience
Researching and understanding your target audience is another key part of a marketing plan; how else will you know how to reach them? As part of your research, it is effective to define your audience in detail as well as any information you can find about them i.e. media usage habits, etc. Your audience will generally depend on your business goals – if for instance your goal is to increase current customer transactions, then your target audience would be current customers. Contrastingly, if you’re looking to increase your client base, you will need to define a new audience and direct communications towards them (and the media they use).
The media you will choose should be based on your research however your budget will most likely dictate the ultimate strategy. Regardless of the size of your budget, if you know a channel works for your business, use it. When used effectively, cheaper options have the potential to bring in a higher ROI.
- Action Plan
The next stage is to create an action plan based on your research. The action plan needs to be a detailed, step-by-step plan of everything that needs to be completed, including who is responsible for each task and when it needs to be completed by. When properly constructed, the action plan allows your marketing strategy to become reality.
- Analyse and Adjust
How do you intend to gage the effectiveness of your marketing plan? What analytical tools will you use to measure success post implementation? What KPIs will be most effective for your strategy? Without a proper plan for analysis and reflection, it is impossible to see whether your money has been invested effectively and whether your efforts have had a positive impact on your goals. Measuring the effectiveness of your strategy not only gives you a realistic view of how your money has been spent but also gives you the opportunity to alter your approach where necessary. After all, the purpose of marketing is to accomplish something, to achieve a goal. If your marketing plan is returning poor results then it’s time to try something new.
A thoughtful marketing budget and plan can mean the difference between overspending on ineffective communications and a wildly successful campaign that generates great ROI. If you need some assistance with your marketing planning or budgeting, get in touch today to find out how we can help.