Ask Silver Bullet: March 2016

There’s actually two different questions here – the first is how to determine your marketing budget whilst the second is how to choose your marketing services supplier!

Determining your marketing budget is not an exact science. Many companies use a mathematical model of a percentage of revenue with B2B companies going for around 5% of their revenue whilst B2C companies take a higher figure of around 12%. This may give you a guide but should be taken as only this – it’s the statistical average of one survey whilst your actual figure is entirely, and only, your decision. The mathematical model also doesn’t take into account exactly what is included in this spend and what is budgeted elsewhere – is signage, for example, marketing spend or capital expenditure, similarly stationery, certain salaries, travel expenses etc.

Budgets also need to take your existing customer base into account – who are they, where are they, what has worked in the past, what media interests them, what communications channels do you presently use and most importantly, what goals have you set for your marketing budget? 

Budgets also need to be flexible – if something works really well, whether this be in social media, outdoor advertising, CRM or video streaming, can resources be switched from other channels and platforms which are not performing so well?

Most budgets are also worked out on annual basis yet marketing spend is very much determined by the time of year. Spring and autumn quarters are usually most productive for B2B companies whilst B2C revenue strictly depends on the product – 60% of Lego’s sales come during the Christmas period whilst the immediate post-Christmas period provides a boom time for family law services providers as the tension of family life over the break often proves too much for some…

So be realistic with your budget based on research into your customer base, competitor analysis, evaluation of historical spend and expected return on investment (ROI). When you have all this information to hand, then is the time to seek help on the best channels to invest in. 

I can’t speak for other marketing agencies, but the first question we ask is not just about what your budget is. Our first questions involve learning about the client, their products or services, their competitors, their market place and their aims and goals. It’s only once we feel we have a grasp of what they’re about that we can start suggesting ideas, opportunities and strategies that they may not have considered before. 

But the available budget is obviously important - it’s not a trick question which some clients seem to think, it’s just so an agency can effectively plan how to best utilise the finite resources. Advertising campaigns are a classic example here and as a general rule, if you don’t have a big enough budget for a properly designed and fulfilled advertisement campaign, don’t do it at all - one off adverts are usually an expensive waste of time with minimum ROI.

Purchasing marketing advice and services will undoubtedly involve decisions on budgets but these usually arise further down the road when a potential client has briefed an agency with their requirements and aspirations which will involve a rough idea of available budget. Again, I can’t speak for others, but we tend to offer clients options dependent on their anticipated spend and which are also designed to become sustainable with marketing spend in one period producing additional profits that fund additional marketing spend for future periods and so on.

In essence, it’s different strokes for different folks – we’ve produced highly effective social media campaigns at a fraction of the cost of a single printed recruitment advertisement in national media. Both worked well for their respective clients whose marketing budgets bore no resemblance to each other, and both clients continue to use the agency!

Do you need to some assistance with your marketing? Do you need to review your strategy or do you have another marketing question we can help with? Talk to us. Email your questions anonymously to us today hello@silverbulletmarketing.co.uk  or Tweet us (not so anonymously) @SilverBulletPR  and use the hash tag #AskSB