The most common way for business owners to approach their marketing activities is to engage in them whenever they feel it is necessary. They may regularly advertise their annual Christmas sale, but in general, they advertise when someone offers them a deal or when they have a little extra money. In other words, they invest in promoting their business whenever it occurs to them to do so.
As you know by now, of course, the effect of such a random approach to promotion is severely limited. The only way to ensure that your promotions have a predictable impact on your business is to engage in them in an organized fashion.
One solution is to use a calendar to organize your marketing plans for the coming year. You can then update those plans quarterly, just as you do your rolling budget.
Using your electronic calendar of choice (Google/Outlook/iCal, etc.), create a “marketing calendar” that you can view separately or in tandem with your regular business calendar. Use it to organize all of your promotional activities for the year.
While you have already determined the total amount you are prepared to spend on marketing, you may not have identified exactly how you will spend it. In this section we’ll take care of those details. This thought process may cause you to make some minor changes to your budget, but as long as these changes are for the better, that’s fine.
As we discuss in “Finance,” there are two basic types of business expenses: variable expenses and fixed expenses. “Variable expenses” vary as a percentage of your sales, while “fixed expenses” remain fairly consistent from month to month. Marketing expenses are somewhat unique in that they can be placed in either or both of these categories.
Variable Marketing Budget — The key attribute of a variable marketing budget is that it rises with sales, helping to support a growth cycle. As a result, your promotions can increase as your sales increase, helping to further increase your sales.
Fixed Marketing Budget — The key attribute of a fixed marketing budget is it makes a regular amount of money available for marketing. This is useful when your expenses are set for the year and do not change month to month. A Google Adwords advertisement is a good example.
Variable and Fixed Marketing Budget — While both methods have their benefits, a combination of the two is usually the best option. This approach allows you to maintain certain regular marketing activities, while keeping pace with your other marketing activities as your sales increase. In addition, it allows you to set a lower limit for your marketing expenditures. It's not usually a good idea to drastically reduce your marketing efforts in response to a short-term sales slump. It only exasperates the problem. So budget for a certain amount of fixed marketing expenses as well as variable ones.
Discretionary Funding — No matter how well you plan your strategy, business will never be entirely predictable. Situations will occur that cause you to change direction or engage in unplanned marketing activities. Assign some money in your marketing budget as “discretionary funding” for situations such as these. Don’t allow it to take over, however. This should be the exception, not the rule.
Design a detailed Marketing Budget for your business using the following form. You can then use it to upgrade your Budgeted Income Statement (see Finance) as necessary, and remember - measure your results!
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After your systems have been in place long enough for people to get a real feel for how well they work, you'll want to conduct a brief review to confirm they're performing optimally. If you find problems, the sooner you deal with them, the better. Following is a list of points to consider for each of your new systems.
- Simple to use/clear – Do people have difficulty using the system? How easy is it to teach to others? How easy is it for people to learn it?
- Easily monitored – Is the efficiency of each system easily tracked by your system or does the process slow things down? Are necessary things being tracked?
- Efficient – Is the system as cost effective as possible? Does it utilize human resources as efficiently as possible?
- Valuable – How important is this system to your business? Is it worth the time, money and energy it absorbs?
- Productive – Does the system produce its output at an acceptable rate? Does it keep pace with its connecting systems? Are the results timely and accurate?
- Impervious to mistakes – How often do mistakes occur? Is this rate acceptable?
- Versatile – Is the system flexible enough to handle everything it's required to accomplish? Will this hold true for the future?
- Secure – Is the system as tamper-proof as required? Are there ways for people to easily (accidentally or otherwise) take advantage of weaknesses in the system?
- Endurable – Will the system last for many years to come, or will it need to be updated regularly?
- Safe – Does the system present any safety concerns for those using it? Does it present any safety concerns for the company?
In this chapter you should have designed, shared, and made a plan to review your:
- Advertising System.
- Marketing Message.
- Marketing Materials.
- Market Testing.
- Marketing Objectives.
- Marketing Channels.
- Online Marketing Strategies.
- Marketing Systems.
- Publicity system.
- Marketing Budget.