One question we get from a lot of business owners is, “how do I effectively allocate my marketing spend?” It’s always a hot topic because the way you allocate your spend can have a tremendous impact on the success of your business and there a lot of choices and options out there.
Unfortunately, there isn’t a simple answer. The ‘right’ approach is often unique to each company and its set of circumstances (which makes a great marketing manager a valuable resource); but, there are some key questions that you should think about to help get the most out of your precious marketing dollars.
Here are our TOP 5 considerations when allocating marketing spend:
- What’s your objective? Are you wanting to acquire new customers, increase customer retention, or win-back lapsed customers? Understand what’s most impactful for your business and target your spend in that area.
- Understand your target market and the best way to reach them. If your target market is broad and the cost of your product is low, mass media is a good idea, e.g. TV, radio, billboards etc. If, however, your target market is narrow and the cost of your product is high, a more personalised sales and marketing approach is a better idea. Ensure you spend money where people can buy your product – if you’re an ecommerce business you should have a higher proportion of digital marketing spend.
- Think about your lifecycle relevancy. PR works well for businesses that are new, interesting and exciting. If your product is new and innovative, the creative might need to be more functional, e.g. focus on how it works. When you’re established and people understand who and what you are – you may need to push the creative boundaries a little harder, introducing promotional campaigns e.g. get a free something with every purchase.
- Get your creative and media mix right. Excellent creative can make your media spend work a lot harder for you, which generally leads to better results for your business. If you’re working with a tight budget, ensure you focus most of your spend on media, i.e. actual advertising (but don’t entirely neglect the creative, it’ll help you stand out from the crowd).
- Test and learn. No question, digital marketing is where it’s at. Social media targeting, Search Engine Marketing, digital re-marketing. Make sure you understand what these are and the principles that underpin them. The ability to target your customers in a highly focussed and engaging manner,then refine and improve you advertising effectiveness on a weekly, daily or even hourly basis has changed the marketing landscape, forever. You can test, learn and improve effectiveness in your marketing rather than make big, blind bets.
- Understand your Return on Investment. What’s your cost per acquisition of each campaign and media type? What’s the average value of each customer acquired? If the numbers make economic sense – just keep spending! Remember to include any discounting activity in your overall marketing acquisition costs to get the complete picture.
The world of business has never been more dynamic and fast
changing. You don’t own your brand any longer – today it’s your customers that
own your brand. It’s easy to get confused, so just remember the basics. You
must have a great product and a strong USP (unique selling points). Social
media is a massive word of mouth amplifier – if you have a great product,
others can do the selling for you!
Got a question about marketing spend, or thoughts on a great follow up blog? Send us a message and let us know!