Blog posts tagged Influence

What shape is your marketing budget?

The questions I most often get asked about marketing budgets are:

• How much should I spend as a percentage of turnover?
• Should I benchmark against competitors?
• How much shall I spend on each discipline (PR, DM, Events, Ads, etc.)?

All totally reasonable questions… but what you should be asking is: what shape should my marketing budget be? Seriously, it is the most important question there is on the budgeting front. So, let me tell you what I mean.

A decent marketing programme is centred on a sales funnel, onto which you’ve mapped the decision making process for your target audience. (see previous posts Making Marketing Pay, and What to Say When).

Fig1: Chart to show the influence of marketing spend across the sales funnel

From this you can put together a programme of activity that moves a person from awareness to a sale. Each marketing technique has a different level of influence at each stage of this process. You need to determine the level of influence at each stage, then apportion this across the funnel.

There are a few ways to decide the amount of influence each technique has:

• Workshop with the sales and marketing team to agree the apportionment
• Surveys or focus groups amongst new customers to get them to assess what they saw at each stage (this can be tricky, as people often post-rationalise decision-making, meaning that emotional triggers are downplayed)
• A best guess (hey, we’ve all got to start somewhere)
• A combination of all of the above.

From this exercise you now have a powerful tool for designing programmes and allocating budget. Now analyse your budget in the same way:

• Split your spend into each technique
• Apportion this spend as per the influence amount you’ve worked out for that technique (for example, if you worked out that PR has 40% influence at awareness, 10 per cent at interest, etc. your spend on PR should be tabulated to reflect that)
• You now have an actual shape for your budget

Compare your actual budget shape to the ideal budget shape you’ve established to maintain a free-flowing sales funnel. This allows you assess where you’re spending too much or too little, and to adjust your spend according to the funnel requirements.

Now, if you have a budget cut, or find a pot of cash, you again have a powerful tool to decide how to adjust your spending. The crucial factor here is to maintain the shape. So, rather than cutting a project that happens to be the right level of spend, you can cut evenly across the funnel ensuring that you’re not leaving any gaps.

• Article originally appeared on Clear-Thought.co.uk

Bryony Thomas of Clear Thought Consulting