Have you started thinking about 2014? Fourth quarter is just around the corner as is budgeting for 2014. If you’re like many marketers annual budgets are a source of dread and frustration. It’s hard enough to predict what marketing tactics are going to work next month, let alone next December.
Hopefully DreamWise can make this annual exercise a little easier this year with this seven-step guide to developing your marketing budget, research resources and downloadable budgeting spreadsheet.
Step 1: Review Your Marketing
About this time every year marketing organizations release survey data on how other businesses plan to spend their marketing budgets next year. While this can be valuable, the best place to start your budgeting process is with a review of your own marketing. If something is working you will want to keep it up and maybe even invest more. Consider these questions:
What marketing strategies and campaigns were most effective and why?
Which were least effective and why?
What goals were achieved and where did you fall short? Why?
Step 2: Do Some Research
At least once a year your organization should conduct some research on the marketplace, marketing trends, and your target market. A good foundation of research should include:
Industry Trends: Unfortunately the best industry research isn’t typically free. ValuationResources.com collects many great resources for each industry, some of which are free. I personally like the FirstResearch.com reports. Additionally, your industry association should be able to provide you with some great resources.
Target Market: Depending on who your target market is some of the aforementioned resources may be valuable. Other resources include the Demographics & Communities page for the Metro Denver Economic Development Corporation, the United States Census Bureau, associations representing your target market and our good friend Google.
Competitors: Oftentimes a team brainstorming session will provide a great deal of valuable information about the competition and what they are up to. You can also check out competitor websites and social media, conduct mystery shopping, and Google them.
Step 3: Assess the Companies Growth Objectives
In order to make decisions about your organizations marketing budget, it’s essential to understand the organizations growth objectives. In addition to overall growth objectives, find out if there are specific revenue objectives tied to products, services, or segments.
Step 4: Set Your Budget
Based on all of the information you have gathered, you should be getting an idea of how much marketing will be necessary to achieve the organizations growth goals in the current environment. Now its time to decide how much money you are going to spend on marketing next year. (Note that some organizations prefer to skip this step and assess whether their budget is reasonable at the end of the process.)
Most businesses allocate a percentage of their revenue to marketing. Often established organizations spend 2-3% percent on marketing and startups spend 3-5%, but the marketing budget that is right for your organization depends on factors such as the industry, size of your business, growth objectives, and your margins. For example, some expert’s believe that startup retail businesses should spend up to 20% of revenue on marketing.
Step 5: Fill in Committed Expenses
Download your free copy of our Marketing Budget Worksheet or use your own budgeting format and start by entering the expenses that you can already count on. For example, if you don’t plan on making any staffing changes your personnel expenses should be easily predictable or if you have an existing SEO contract you can go ahead and enter those expenses up front.
Step 6: Brainstorm Your Marketing Strategies
Now comes the fun part. It is time to brainstorm your marketing strategies for the year. Take a look back at the research you have done and work with your team to decide how you are going to market your organization in the next year. Some organizations like to get into the details of each campaign while others just like to create a general framework. Either way be sure that you are taking into account the organizations growth objectives. If you are looking for professional guidance, we at DreamWise would love to sit down and brainstorm with you.
Step 7: Research Costs & Finalize the Budget
Once you have an idea of what you want to do, its time to start researching costs and narrowing down what is realistic within your budget. If you need assistance in figuring out what to budget, DreamWise would be happy to help you develop some estimated costs. Use these cost estimates to fill in your budget and be sure to double check that you aren’t missing anything!
We hope that the resources we have provided will make your budgeting process a little easier this year and we look forward to working with you in the coming year to create and implement your marketing plans.
Josh Thill is the award-winning Creative Director for DreamWise Marketing Solutions. DreamWise Marketing is a 100% woman owned full service marketing company specializing in web development, SEO, brand strategy, direct mail, printing, and order fulfillment.