Strategy – the real world costs
- 01 April 2016
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When real-world costs inform marketing strategy, marketers have a better chance of meeting their goals on-budget.
There’s no such thing as a free lunch, still less a free marketing campaign. The most brilliant, original and potentially effective initiatives are only possible if there is enough budget to begin and – crucially – to see them through to a successful conclusion.
To avoid running out of funds halfway through, it’s wise to accurately estimate all possible expenses in advance. Here are some suggestions on how cost can inform – and be integrated into – strategy:
- Integrate from the very start. Many small and mid-size businesses work from a budget alone, rather than a budget and strategy – so their activity is focused on finding ways to spend money, rather than looking to the best and most economical methods for meeting objectives.
- Split your goals into numeric and strategic. To allow for a rigorous assessment of your approach to marketing over the year, it’s essential to know your financial ambitions (profit, market share, number of customers, units sold) as well as the broader marketing goals (repositioning the brand, entering a new market).
- Move beyond estimates and get real figures on cost wherever you can. This is especially important if you are an SME trying to work out how much to spend. It’s hard to establish what would be a sensible level of spending, unless you have concrete figures on reliable revenue, profit margin and expenses, plus information on strategic priorities for the business – such as the decision on whether to grow or consolidate market share.
- Check and check again. Figures for the business change, so it’s worth revisiting the financial side of your monthly strategy every quarter, to take account of any nasty surprises that could leave you short of budget – for example, the board might throw a one-off event at you that needs to be funded from the marketing budget. It’s equally important to track your return on investment – this is good practice, of course, but it can also help you justify your spending.
- Use agencies wisely. They can be expensive – but equally, they can actually save you money or deliver greater returns thanks to their specialist skills. It’s a good idea to track the ROI they deliver, and also to compare their price to the cost, in time and money, of doing the work internally.
- There’s a chance that you might be given more money than you need for effective marketing – but beware the impulse to spend every penny. The marketing budget should fit the industry, size, growth phase and ambitions of the business – there’s no point in winning more orders with a great campaign, if your business can’t deliver, while maintaining its good standards of service, and if you’re an established player you won’t need to spend as much as a start-up.
- 554 views