Taking the same-old approach to your marketing budget will likely yield the same-old results. A marketing insider shares a smarter way.
“Business has only two functions — marketing and innovation. All the rest are costs.” – Peter Drucker
As is its nature, summer will all too quickly turn into fall — and with it, budgeting season. So before the calendar pages start running their merry way toward the holidays and their attendant spreadsheets, it’s worth taking a moment to ponder your approach to marketing investment.
Far too often, the way a marketing budget is defined is based solely on a dusty formula or rote thinking. That’s not just unfortunate, it’s a missed opportunity to truly contemplate innovative methods of creating and energizing customers, testing hypotheses and building brand equity.
To that end, here are a few suggestions for how to reconsider not just how you invest the bulk of your marketing budget, but the very nature of how you use marketing to drive your business forward.
Start with the basics — what are your competitors spending, on what, during what time period, in what manner? This creates a baseline understanding as a frame of reference.
Look not just at your direct competitors, but indirect and adjacent players as well. Become a student of marketing investment, in both traditional best practices and non-traditional emerging strategies.
You’ve covered spending, now take a look at return. From what you can tell, what did the competition seek to achieve with their investment? What worked (or didn’t) given the presumed objectives, and why? And what can you measure, as either direct or indirect performance indicators?
If you don’t have the resources for formal analysis tools, don’t let that stop you from conducting a more informal analysis. What can you glean from formal sources (e.g., online data) or informal sources (e.g., feedback from sales)? What do you think is going on? What do you believe will happen in the future? This information will have implications for your business and brand moving forward.
Marketing is equal parts science, art, and common sense. Now it’s time to put all three to use. Build a range of hypothetical investment models. Start with a practical approach where you justify every line item. Do your best to define how you will measure success for each investment, and how this success will in turn provide an ROI for your business. Connect every dot, from objective to strategy to tactic, considering all aspects of your plan components.
Then jump to “sky’s the limit” and build an unrealistically high marketing investment (from 5x to 10x to even 20x what you have spent historically). Again, project what these plans might do for your business. How might they change consumer perceptions? Traffic patterns? Conversion levels? Retention? Referrals?
How might a radical new approach help scratch the marketing itch you’ve been struggling with for years? How might a new marketing framework help address the problem that you can’t seem to get off the corner of your desk? Bottom line, what might this do for your sales trajectory and brand equity? While it’s unlikely that you’ll execute the 20x budget option, conducting an exercise like this with your team can help identify fruitful areas of investment.
Whether formal or casual, taking time to truly ponder the larger questions around your marketing investment is a virtuous activity that will either solidify your current approach or help you create a path toward innovative new frontiers.
In a time of such radical change, it behooves all marketers to spend a little more time asking, “What if?” for their approach to investing. In the words of explorer André Gide, “Man cannot discover new oceans unless he has the courage to lose sight of the shore.”