Even though many times there is more creativity in budgets than ads, the easiest way to get a marketer to groan is to tell them to do a marketing budget.

The Marketing Budget Process

The first step in establishing a marketing budget is to remember that marketing goals are simply a means to achieving business goals and should be viewed as such.  As with most things in life, almost anything is possible with enough time and money – it is just not a reasonable and sustainable approach.

For most companies, marketing is a method to get sales leads, so then the first question to be answered is:
What is the value of a qualified sales lead to your business?

If you already know – skip to the next paragraph.  If not, start by determining the average value of a sale, then subtract the fully-burdened (all of your expenses) cost of the sale, to get your profit per sale.   Now you know the estimated maximum to pay for a lead – you need to determine an amount less than this or you lose money.   All that said, this is a generalization – in the case of certain business conditions, like a start-up, many companies are on a (hopefully brief) the more you sell, the more you lose plan.  They just make it up in volume.

Next, determine how many leads you can reasonably handle and effectively close and your average close rate.   Now, just do the math to determine how many leads you need to fill the pipeline (if you can handle 5 sales per month and have 10% close rate, you need 50 leads per month).    Last, take the amount you have determined that is reasonable to pay per lead and multiply it by the number of leads you need to meet your sales goals.

That is your estimated optimum monthly marketing budget – if you pay more, you will be cutting into profits, if you don’t invest that amount in marketing, you will most likely be unhappy with the results.

Or  - you can do what most companies do – from the very large to the small  - and pull a number out of the air. Many times, this amount, is the amount “you can afford.”  This is reasonable – it is hard, especially in this time of restricted credit, to have money to spend that you don’t have.  However, at the same time, expectations need to be reset on the expected outcome.

Next up – putting that marketing budget to work with a tactical marketing plan.

In a similar manner, marketing positioning is the point guard of your marketing communications. Positioning defines and controls the overall identity of your product or service and involves the art of ensuring the unique benefits of your offering are effectively communicated and matched with the prospective customer’s needs and desires.

Time and thought should be devoted to crafting an optimized marketing positioning statement.

• What position do you want to occupy in the customer’s mind?
• What are the truly unique product attributes and benefits of your offering?
• Are these benefits already considered relevant and perceived as valuable by the potential customer?
• What else is perceived by the customer as a similar, better or worse offering?
• Why?

Market Messaging

Good market messaging clearly communicates the key ideas of the positioning statement to the customer in a straightforward, consistent manner that leads them to action.  Great market messaging makes it a memorable experience.

Is Your Positioning an All Star or a Bench Sitter?

Positioning and messaging are topics that many small businesses consider too difficult to tackle and/or are simply stuff that corporate marketing teams, agencies and consultants like to discuss to make them sound important. While the latter part of the statement may be partially true, any business can and should seek to have an All Star positioning statement and marketing messaging.

Customers have a perception of your offering with or without your input. Isn’t it time to run some offense, control the message and ensure clear communication occurs at all points of customer contact?

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Next-> Opportunities: Awareness Activities

Over the next series of posts, we will cover the various aspects of developing a marketing strategy and then creating a tactical marketing plan.

• The Discovery process
• Defining benefits & features
• The Buying process & the participants
• Who are your customers?
• Markets – SMBs, verticals, specialties
• Competitors – learn from them
• Marketing insanity
• Positioning & messaging
• Opportunities: Awareness, Offline & Online
• Developing a marketing budget & a tactical marketing plan