Budgeting & the Importance of the Evolving Marketing Strategy

Marketing is easy if you don’t care about results. For the rest of us, for whom results matter, marketing is tough. Let’s not sugar coat things here; it can be really fucking hard to create a marketing strategy that works. Despite all the best advice, there is no set formula for success. And because everything is subject to change, including your customer preferences, your industry innovations and even a pandemic, your marketing should be ever-evolving, too.

Since predicting the best marketing and advertising plan can kind of feel like herding cats, here are a few strategic details to keep in mind as you go. If you get nothing more from this conversation, get these three points:

  • Always Be Evolving Your Marketing Strategy in Line with Your Vision
  • Always Be Testing to Quickly Identify When Campaigns Are No Longer Working
  • Always Be Reviewing Your Data

Determine Your Marketing Goals & Objectives

As a reminder, it’s super-important that anything you do aligns with your original brand voice, brand message and your startup vision. The same approach is taken when developing your buyer personas when you seek to identify the emotional responses from your customers. Approaching your marketing strategy follows suit, as well. Set clear and definitive goals and objectives that follow the path you’ve already established with your brand and personas. Anything outside of this path, or without a goal, is like throwing marketing budgets out the window.

Tina’s Cleaning Service: Before Tina invests in a direct mail campaign to local residents, she sits down with her data. She knows homeowners are the targets and her buyer persona represents the busy mom who needs an affordable hand around the house. Tina verifies her target audience is well represented in the list of addresses where her mailer will be sent. She crafts a message for each mailer, “Too Busy to Clean?” She includes a call to action to call this month and receive a 10% discount by mentioning the code word “Holiday Clean” so she can track leads that result from her campaign. But how can she drill down on calculating her costs for this campaign and measure results?

Calculate the Cost of Each Marketing Tactic

Before engaging in a marketing or advertising campaign, make sure it aligns with your buyer’s persona and your buyer’s journey. Understand your expectations for results in terms of how each engagement strategy will deliver. You can then begin to estimate any ROI for each campaign. For example, if Tina only sends out one round of EDDM mailers, she can’t expect immediate results. She’ll need to send those to the same households six or seven times with different messages and following the buyer’s journey, before she’ll start receiving inquiries. 

Brand Advertising vs. Direct Response

Shouting your company name from the rooftops won’t inspire any buyers. But if you want to grow recognition of your brand, which may lead to customer trust and buying down the road, you’ll look for advertising methods that allow you to introduce your brand to your audiences and pull them toward your company. That’s brand advertising, and it may push prospects further into the buyer’s journey. But it won’t likely produce immediate bottom-line results.

Direct response is a different animal entirely. This is an ad, email or a billboard that says, “call now” and will push your audience to buy from you. These types of campaigns might feature discount codes for buyers that allow you to track which campaign prompted the response. If you need sales now, a well-placed direct response campaign can provide the results you seek.

Branding Example: The Coca-Cola Polar Bear Commercials or Santa Driving the Coca-Cola Truck

Direct Response Example: Furniture Row’s Labor Day Sale on Bedroom Furniture

Understanding Costs Per Lead

Marketing doesn’t have to be a blind shot in the dark. You can assign a cost per lead and do a little math to sort your ROI potential per campaign. Divide the total amount of ad spend, for example, by the number of leads generated. These leads may only be in the awareness or consideration phase of the buyer’s journey, but they count as actionable leads you can groom into buying later. If you spend $100,000 and ultimately generate 1,000 new leads, then your cost per lead is $100. Then ask yourself, would you pay $100 for a new customer? If you can’t justify the cost, then you can scale down. If a new customer is worth $1,000 to you, a $100 cost per lead is a pretty reasonable investment.

Comparing Marketing Costs & Marketing Averages

If you have an unlimited stream of cash and budget for marketing, then you don’t give two shits about this calculating costs conversation. However, if you’re not that guy and more like the rest of us in business, money has to be invested wisely. This is where you’ll calculate and compare marketing costs to determine which channels will provide you with the biggest return on investment. How many sales do you need to recoup the initial investment across each channel?

That’s great and all, but how much should the average business be budgeting for marketing investments? The Small Business Administration suggests spending seven to eight percent of your company’s gross revenue in marketing and advertising efforts. And that’s generally recommended for any business doing less than $5 million in annual sales. But this certainly isn’t a rulebook for everyone to follow. Businesses are each unique and so are their budgets.

Averages like these percentages of ad spend recommendations are just suggestions. You’re in the driver’s seat here. It’s up to you to determine an acceptable marketing budget to set. It’s not uncommon for companies to commit 30-40-50 percent of the revenue to marketing. And when they apply the basic principles of brand voice, buyer personas and buyer’s journeys, they can apply those marketing dollars right where it matters most. As with any investment, especially in business, there is a risk. How much risk you’re comfortable with is entirely up to you. Be smart about your vision and your strategy and remember, it’s only a waste of money if it doesn’t work.

Paul’s Used Car Lot: Paul estimates he makes, on average, about $2,000 per used car he sells. He allocates $200 from each sale to his marketing budget. He knows that every dime he spends has to move potential buyers through their journeys, continuing that count of six to seven times someone encounters his brand or inspires a vehicle sale. He uses this understanding as a guide for him to know precisely where and when to engage. But he’s wondering, will his approach always work? How can he identify if needs change or his buyer’s cycle shifts?

Always Be Testing (And How to Get Started)

Just because one marketing campaign works really well today doesn’t mean it’ll provide the same results next month. And the only thing worse than spending on the wrong campaign is spending on the wrong campaign for one more day than you have to, right? Track your results over time to see which tactics are working best for you and what are not. It’s often referred to as ABT or Always Be Testing. 

What Should You Test?

Test everything you can track efficiently and consistently. Don’t worry about measuring what you don’t know or can’t monitor regularly. Look for control groups or trends. Keep tabs on the number of orders, conversion rates or website visits. Use every measuring stick you have in your toolbox and track it all to ensure you’re moving in the right direction.

Prioritize & Schedule Your Tests

Don’t create more work for yourself or your teams by implementing a rigorous testing method that doesn’t really provide the data you need. Instead, prioritize your testing. Spend the majority of your time testing with methods that offer the most significant impact for the least amount of effort. Then you can create a calendar to help track your testing efforts on a monthly basis.

Testing Copy

Test your content, starting with your headlines on your website. Test your transactional messages by measuring your conversion rates. The tone and style of your messaging matter, too. Be mindful of the varied results with professional tones versus conversational tones. You can then determine which offers the best outcomes.

Testing Creatives

Marketing is a creative endeavor. Get your creative juices going and share ideas with your teams. Some of the most genius marketing campaigns came from the least expected sources. Don’t be afraid of risks and avoid stepping out of your advertising comfort zone and do something new, as long as you track and test the results. One-off marketing mistakes are never damaging. They become damaging when you continue to employ them with no results, though.

Testing Channels

Back in the day, most companies used to run ads in local newspapers. And for each ad, they might include a message that said, “Call Tom Today” or “Ask for Judy.” In reality, no Tom or Judy worked there; it was a way for marketing managers to track which ads led to the most phone calls. Today’s marketing is spread over a variety of channels from online industry listing sites, social media, and podcasts. As you explore the different marketing avenues for your business, consider adding in techniques to measure the results of each. You might even opt to add an “Ask for Judy” if it’s easier to do so.

How Often Should You Test?

The short answer to this question is regularly. Don’t just test for the first few weeks or months and then abandon testing. Set benchmarks and calendars to stay on track. The longer a campaign continues, the less effective it might become. So, don’t get too comfortable with any marketing strategy for too long.

Hopefully, you have been able to take advantage of some of this month’s marketing advice. We’re going to dive into a social media marketing conversation next month in great detail, so you’ll want to stay tuned for that and bring your marketing teams along, too. For now, if you have other questions about buyer personas, marketing ideas, or metrics, let us help! Contact our marketing team and schedule your FREE consultation today!

Marcus Wendt

Chief Executive Officer

Marcus helps lead and grow companies from the ground up. He has a proven track record. His experience is diverse with expertise in sales, branding, marketing, automations, manufacturing, building teams, managing operations, sourcing suppliers and outsourcing to offshore locations.