Marketing Budget optimization is not about reducing your spending in marketing activities, but it’s all about when you look back to your marketing Budget data and get the maximum benefit out of the same. If you are a small shop owner who wants to spend just hundreds of your marketing promotion or an MNC with millions of marketing budgets, both have to optimize their marketing spends.
Spending money on wrong channels or making mistakes will put your company at risk by losing your competency in the market. So here the best ways to get the best out of your limited marketing budget. Remember one important point, you could not optimize the marketing budget and sit idle for the rest of your life. It’s an on-going practice that you or your team will continue on a monthly or yearly basis because it’s all about using your money wisely.
1. Define your marketing objectives
Define your marketing objectives and priorities before starting the plans. You need to be very clear about your objectives and vision to move forward in the marketing activities. Your objective might be entering a new market, increasing sales, or establishing a new sales channel, or developing a new product line. Then based on you can set your marketing budget share and allocate funds towards these goals forecasting the possible results.
2. Define your marketing Budget share.
Based on your industry, the size of the company, product positioning, and your goals, you need to set the marketing budget allocation with respect to your sales revenue. For established firms, it will vary between 1 % to 15%. But the same for a start-up company can go up to 25%. This will help you to be clear on your ROI of your business.
3. Understand your customers
Before preparing a marketing plan, you should be a very clear idea about your target customer group. This will help you to define your communication strategy and the message what you want to communicate with your potential customers.
4. Define your marketing strategies
You need to do a self-evaluation and define what kind of communication will be helpful for your kind of brand and product. This will be closely related to the brand positioning. If your marketing strategy will correlate with your product, customers, and strategy then the effectiveness of your ad campaign will be much higher.
5. Organize your team
It’s very crucial to have a team to execute marketing activities. Based on your budget, you should have a dedicated team or assign the job to someone in the sales department. But you should assign the marketing objectives to a person and make him accountable for the same.
6. Don’t overestimate your revenue
Everyone will be very hopeful about their business ideas and expect very massive spikes in sales revenue. Its good to be optimistic about the future. But in the case of making a marketing budget, you should be realistic than optimistic. Because when you are following a share of sales budgeting method, there are high chances of being overspend and which affects your profits. Calculating your territory wise sales on a monthly, quarterly, and yearly basis will help you develop a proper marketing budget and keep your overall business at profits.
7. Understand your seasonal fluctuations.
Every business will have its own season fluctuations. Understanding the seasonality in your business and planning your marketing activities in line with seasonality will increase your chances of being a success. It will also help you plan your resources and spending on different schedules for peak and quiet periods over a year. Eg: Consumer buying will be very high during Diwali and many of the companies came with massive ad campaigns during Diwali.
8. Always do some research
If you want to survive and grow in the business, you always need to be updated with the trends. The trends are not only required in product development but also need to include it in your marketing communications. All researches need not be very expensive and time-consuming. Taking some interviews with customers and channel partners also bring you a lot of insights about the market. Proper researches will help you to plan in advance and avoid surprises in businesses.
9. Define activities under marketing budget
Your need to define which all activities will be considered from your marketing budget. Some companies will include the salary of marketing employees, training costs, market research expenses, etc everything under the marketing budget. At the same time, some companies will only include the direct expenses of marketing activities.
10. Define quota for marketing activities
There is a different stream of activities under the marketing umbrella. For example television ads, newspaper ads, magazines, radio, billboards, SEO, email marketing, etc. you have to set a quota for each of these categories or channels based on your target consumers and understanding the best channel. Eg: The luxury brand will likely advertise in in-flight magazines. That might not be suitable for mass products. Similarly, Television advertisement s may not be suitable for an independent shop in a city.
11. Plan regular Budget reviews
Always consider your marketing budget as work in progress. It should be reviewed and adjusted as often as possible. The adjustment should be in both the directions, if your business is performing above your expectations, you should increase your budget with the ratio of sales share and vice versa. Being flexible with your budgets will help you to reallocate funds towards best performing elements and increase the overall efficiency of your marketing campaigns. You can change your plans according to market conditions to increase the benefits and reduce the costs.
12. Adjust for Economic conditions
All businesses have to deal with the economic conditions of the country. When you observe the economic conditions, it will give you insights about how the same is going to affect your industry and your business. This will help you to reduce your losses in difficult situations.
13. Invest in creatives
Good creative will be the blood of any good marketing campaign. Creative Content will be a television commercial, explainer video, magazine creative, poster, notice, or social media post or any other advertisement material which will be shown in front of your target group. A good creative will multiply your investment in promoting the same. In the digital space, good creative will become viral and reach to your customers without any additional investment.
14. Measure Everything
If you want your optimize your marketing budget, try to measure your every spends. There is a limitation is quantitative measurements in traditional advertisements like Print, Magazine, radio, Bill Boards, etc, you should have a justification for spend and basic idea about the cost per eyeball.
15. Invest your time.
Marketing optimization is time-consuming and requires a lot of patience. None of the brands around you built over months. It will take years to get substantial results, awareness, and recognition among consumers. Until then you have to spend time aggregating the data from various channels, collecting feedback from customers, analyze them and derive insights from it.
16. Get into the details
Detailing is the art of making a fundamentally strong marketing plan. A Strong marketing campaign should have a strong correlation with the sales of each product line at your lowest territory level to cost for each advertisement mediums such as magazines, newspapers, television channels, etc. This will help you to understand your strengths and weaknesses and build an advertisement campaign over that. You can also use different creatives for each medium, channel, and different TG of customers.
17. Don’t Copy your competitors
Don’t blindly follow what your competitors are doing, many times they might be wrong or overspending. You stick with your strategies and always try to make some fresh ideas and content which match your brand identity. Over a period of time, this will help you to make a unique brand positioning over time.
18. Make your own formula for success.
The final and most important point to optimize marketing budget is the uniqueness of the plan. You have to identify what will work for your brand and what will not. If you are able to find the right combination of product, positioning, ad budget, brand positioning, ad channels, content, etc, then you are achieved the ultimate success in your brand building. And this is the most optimized marketing plan for your brand.