Spend a million dollar marketing budget? Harder then you think?
John Jantsch wrote a great blog on What would you do with a million dollar marketing budget? to start everyone’s mind thinking, and writing from my desk in the UK, and looking at the Dollar/ Sterling exchange rate, not a challenge! Even absconding with it and setting up a home in Acapulco on £500,000 isn’t that attractive anymore! Nowadays , it’s just a few days work for the David Beckham’s of this world. So, back to reality, and Plan B.
To get to the point, it is easy to spend this level of money on Marketing Activity. A cursory browse of “expert marketing businesses”, highlights the number out there with insatiable appetites to hold your hand and spend your budget.
The “usual” ways still predominate:
- Direct Mail;
- E-mailings;
- Customer Incentives;
- Advertising your business in every conceivable way.
Of course there is a place for these activities, but we all know that the “same old stuff” doesn’t work as well anymore.
So, what is the “best” use of a marketing budget. Let’s start with the goal. What outputs or results are expected from your marketing activity?
Understanding where it fits into the strategic business plan is the first step.
Is it about “awareness”? (More difficult to measure).
“Bits of Paper” (Lots of evidence, but how effective?).
“Income and results”? Now we are talking.
That means sales, and working seamlessly with the Sales Team(s). Perhaps the question should be
“What do they need from a Marketing Budget?”
Some years ago, I saw a statistic that has always stayed with me:
An average business spends six times more to attract new customers than it does to keep old ones. Customer loyalty can be worth 10 times the price of a single purchase.
If we delight our customers, they seem to spend more of their wallet with us. How strange! And delighted customers are much more likely to refer us to their Suppliers and Clients, if we ask them. So we have the opportunity to generate a hot lead, as well as extra revenue! How much is that worth? So we need to spend some of our Marketing budget “delighting” our Customers. We just need to work out how to do that.
We hear it all the time, don’t we. “The most valuable asset is our staff!“
So, what are our plans for “servicing” this valuable asset? I bet the car fleet is serviced without fail. What about our “best” asset?
Can we invest the marketing budget in them? WOW! A radical idea.
Not just the Sales Staff, but of equal importance, those who deliver “Service” (whatever that means) to our customers. Anyone who touches a customer owns your business and has the opportunity to “Market” it. And they will do it really well, indifferently, or really badly. How many “touches” does your business have each and every day with existing and prospective customers? What is your propensity to “Market” from within your business? So how much, and how well are you doing?
The question now becomes “what do your people need“? Think about it and you almost certainly already know the answer. If not, do the diagnosis. You also find out what will motivate them to change. Can the marketing budget help here?
My solution?
Invest some of your Marketing budget in your people. How much of your marketing budget will you need? That depends on how motivated, skillful and successful your people are already.
How much will it deliver? The big question for you is: are you more likely to get a return on your Marketing budget by spending it with a third party, or your own people? And if it is the latter, how much additional revenue would you expect them to deliver? Would a 100% return on the cost in year one be an unreasonable goal? Now there’s a thought!
