Do you have a budget plan to get you where you want to go?
By Tiffany Harris, President, Foster Marketing
When you build a home, you don’t just walk up to an architect and say, “Build me my dream house!”There is a great deal of work to be done and many details to be decided upon before you begin construction.
The architect must consider location, number of bedrooms, one story or two, two-car garage or maybe three, and the list goes on and on. Many of these factors are decided by how much home you can afford to build and what fits in that budget.
Just as having a budget is essential when building a house, having a marketing plan and budget can help define what strategies and tactics needed in the coming year.
For many, the budgeting process can be painful, especially if you don’t have a frame of reference to build upon. Identifying what your company will need to do 15-18 months from now and how much those efforts will cost can be daunting. For those who set out alone to establish a marketing budget, the result can often mean missed opportunities, limited focus, no plans for contingency and ultimately an incomplete budget.
If establishing a marketing budget is new for your company, you can take comfort that this year’s hard work will pay off by making the process much easier next year. Once you have a benchmark to measure against and build upon, the annual budget journey is a far less long and winding road.
In fact, the budgeting process, if planned, prepared and presented properly, can be helpful in providing your company with a plan for both internal and external marketing efforts that will increase your market share in the years to come.
At Foster Marketing, we recommend using a task-method budgeting format. Here are five steps to help guide you through the process of establishing a marketing budget that will forward your marketing and sales objectives.
1. Identify objectives: Just as any good map should indicate a path to your destination, your budget should provide a guideline to growth. Possible key objectives could include moving into new international markets, launching new product lines or even a planned IPO.
2. Identify key markets: Knowing who you want to reach will help you plan which channels you will use and how much you need to spend. Be specific in defining your key markets. For example, from what countries and regions do you expect most of your sales? Are more of your prospective customers active in shale plays or are they drilling in deepwater? This also is where you define what you will be selling to your audience. For example, do you have two new vessels operating in the North Sea? Have you added a rental tool location in Pennsylvania? Or, have you expanded your capabilities to service drilling rigs throughout the United States instead of just the Gulf Coast?
3. Identify marketing channels: This is where you consider the tactics you should use. Some tactics you may prefer over others, but the following list is a good guide to get you started. If you are working with a relatively small budget, you may not be able to pursue efforts in all these areas, but this gives you a starting point. As your company (and marketing budget) grows, you will likely fill out more sections such as advertising, trade shows and direct mail.
a. Branding and identity
c. Public relations
d. Electronic and digital
e. Collateral and print
f. Trade shows and events
g. Direct mail
4. Develop the budget: Here is where you begin putting numbers on paper. Begin by looking at what you’ve spent in past years. It can also be helpful to look at how much similar-sized companies in your industry are spending, as well as your key competitors. If you are really at a loss on how much you should be spending, typically companies in the energy industry spend 2 percent to 3 percent of their overall sales on marketing. This is not a foolproof number but it is a good starting point if you are unsure where to begin. Take into consideration that major marketing efforts such as rebranding a company or going international will require additional funding. Also, take into consideration what sort of growth you are aiming for because netting a big increase in sales requires more marketing dollars.
5. Present the numbers: Here is your opportunity to sell your plan to the decision-makers in your company and guarantee the funds needed to make that plan happen. First, prepare a plan that is easy to read and to the point. Using a task-method format shows what you will do with the money, such as developing a website or brochure or a trade show booth. Use historical numbers in your presentation to show why and where additional funds will be used, and share findings from your research on new market potential. Including industry and competitor comparisons can help make your argument more persuasive. Having options prepared in your plan is also helpful. You never know when a decision-maker will suddenly consider hosting an event or creating a new corporate video a must.
For more than 30 years, Foster Marketing has worked with clients to efficiently and effectively plan and develop their marketing budgets. By working with an experienced professional, building a marketing budget that allows you to reach a broader audience can be much less stressful. Enlisting someone knowledgeable in available marketing tactics can help your company create a strategy that leads to a more prosperous position.
Foster Marketing specializes in creating marketing strategies that get results. From identifying objectives to budgeting and crafting the message to measurable marketing tools, we guide our clients through the entire process on the road to success.