Without a solid budget, you can easily accidentally overspend on marketing costs so it’s a control mechanism. Similarly, you can underspend which may have a disastrous impact on your revenues and could backfire on you this time next year when you’re fighting for your share in your set’s budgeting allocation.
But, budgeting’s not an easy task. With such an important role to play in your success, you can’t afford to get it wrong. We’ve got three steps to help you organise current finances, determine where to spend marketing pounds and make strategic adjustments throughout the year.
Step #1: Organise your financial information
Get organised about your current financial situation. When you’re working around estimates, it’s impossible to create a realistic marketing budget.
Understanding your finances starts with your revenue information. You need to know how much money your chambers makes on a monthly basis and the variations that might exist. Although income can vary significantly month-by-month, you must use reliable revenue. This is the minimum amount your chambers earns each month. Anything over this monthly minimum is extra revenue that cannot be added to the budget because it’s changeable.
Next, subtract your business expenses. This includes everything from office space rental to clerks’ room salaries. Monthly expenses should be subtracted from revenue before defining your marketing budget. A realistic budget plan will always focus on income that exceeds expenses, not just total revenue.
When you’ve determined disposable income available for your chambers, decide where this money will be spent. Marketing is only one business area so divide the money based on your strategic goals, of which marketing should form a key part.
Step #2: Decide where to spend marketing monies
Once you know the total amount potentially available for marketing, decide how you intend to spend the money. If you have a limited budget, then you should consider lower-cost activities such as small print adverts, social media and email marketing. With a larger budget, you can afford some events, sponsorship, ambient advertising, printed newsletters and more.
Integral to this stage is reviewing which activities have worked in the past. If email newsletters do the trick, then you should continue, even if you have the funds for more expensive alternatives.
Also, consider which channels allow you to reach the right audience. This comes down to customer profiling and finding out where your clients and prospects hang out.
When considering a new marketing channel, you should set aside some funds for testing. Since you don’t know if it’ll work for your chambers, you should only use a small portion of your budget. Once it’s tried and tested, invest a little more.
Step #3: Assess data and make appropriate changes
The final step to build a solid marketing budget is analysing the plan and making adjustments which impact positively on revenue. Ultimately, marketing is designed to achieve more revenue. If any of your activities don’t do this, then it’s better to remove and try something else or invest in proven activities.
Evaluation’s the process of comparing performance and recording changes to revenue – has it increased, decreased or stayed the same and can you attribute to any particular marketing activities?
Always keep the budget in mind when you make decisions on marketing spending. That way, you can explore different ideas and find the best marketing mix for your chambers.