Deciding to go out on your own requires a lot of planning.
One of your chief concerns is finding enough clients. In your previous role, your employer provided you with advantages. You were part of a structure that provided you with leads and a brand identity.
Or maybe you’re revamping your company’s marketing plan. Either way, you’ll need a budget
Here are some basic concepts and suggestions. They’re designed to give you a linear process so you develop a marketing plan the will grow and evolve with your company.
However, no amount of money will be effective unless you have a structure in place to nurture and develop the leads you generate.
Your CEO, Owner, or President needs to be involved. Marketing plans ultimately touch every corner of your company. You’ll be in talks with finance, IT, sales and service. These departments can be resistant and you’ll need some authority to effect change.
WAIT…HOW MUCH MONEY DO WE NEED?
Answering the question of how much marketing budget to start with is challenging because it’s just a guess. A smarter question would be: How will I track my results? By tracking and testing, you’ll be able to revise and reallocate your budget effectively.
If you’re starting a company, this is hard.
If you’re starting a new marketing role at an existing company, you’ll at least have prior data to work with.
In either scenario, establish the business goals first. Marketing is simply getting clients to behave in ways that support those goals. And advertising is one tool to achieve that.
For the new company, market research is helpful. What is my competition doing, charging and how are they advertising?
Prior success can be a helpful indicator. For an established company, looking back at prior marketing campaigns will give you a starting point. For a new company, what worked at other similar companies you worked at?
2. DETERMINE AVERAGE SALE PRICE
Again, if you haven’t launched your company, you’ll have to estimate and revise later.
The average sale price (ASP) gives you unit goals. In many companies, different products are sold that can vary. This is where an average will dictate your marketing plans.
When you know approximately how many units you need to hit your financial/business goals, you’ll have greater accuracy determining the number of leads you’ll need to get there.
But what is a lead?
3. DEFINE CONVERSIONS
Are you seeing how linear a marketing plan is? Everything builds on each other. It trickles down to the sales department. But that’s for another time.
Here is a textbook definition of what a conversion is. It’s when the client does something you wanted them to do.
Your marketing plan can and likely will include multiple conversions.
For example, your website might include an ecommerce shopping cart for small purchases. That’s one conversion.
Then, there could be an online form to collect phone numbers. With these phone numbers, your sales reps will upsell the prospect. This form-fill is another conversion.
Your plan has to define what you’re trying to achieve. To clarify, some conversions can be purchases. And that’s where your cycle ends. Other conversions can be leads like phone calls or walk-ins.
4. TRACK YOUR CONVERSIONS
Don’t forget to track your conversions. In other words, how much money did you have to spend to generate those 35 phone calls last month? How much was spent to capture those 110 emails from the site last quarter?
With this information, you can budget more effectively.
But how exactly do you track conversions?
That’s a whole other blog post. From digital media like AdWords, Bing, or Facebook, you can track the number of clicks your ads get. You can even track the number of times they show your ad.
Phone calls can be tracked as well.
Planning your marketing budget is a group effort. The first step is to engage your company’s chief executive. While this blog provides a high-level strategy, implementing your strategy can waste your budgets…especially with online advertising.
Consult a marketing consultant for that part if you get stuck.