Setting a budget is an essential component of the overall marketing planning process. A budget enables you to:
- measure the cost of your marketing activity
- enable you to compare the return of your investment.
A budget is especially critical when you are planning your marketing activity and deciding on what activities would best help achieve your business objective. Often the activity that you implement is decided upon, based on the budget you have available. Understanding the effectiveness of each marketing activity, enables you to set an accurate budget year on year.
Benefits to you
- Understand how much your practice is going to spend on marketing
- A budget enables you to measure the effectiveness of your marketing campaign
- Guide you to not over spend, for little or no return
- Assist in measuring the effectiveness of different marketing activity (eg. seminar vs. advertising activity vs. social media or even outsourcing)
- Help you to understand what you spend and the return of that spend.
There is no disadvantage of actually setting a marketing budget, but there may be some practices that do not initially understand the benefits of having a budget. Unfortunately, below are some common pitfalls:
- Practice is not willing to spend money on marketing activity
- Practice does not understand current marketing spend.
- Practice does not feel they have the money to spend on marketing activity.
- Practice does not know how to measure and compare the marketing return on investment.
- What is your practice actually spending today?
- Is it effective for you?
- Does the budget need to be reduced or increased based on your business objectives?
When setting your marketing budget, it is important to consider the following:
- Your time
- Staff costs
- Venue hire
- Marketing material costs
- Follow -up activity costs
- Travel costs
- Subscriptions relating to the activity
Reviewing Marketing Spend
On a regular basis the practice should review the budget, to ensure they have not gone over budget, the activity is still effective and even relevant. Just because it was planned, does not necessarily mean the activity needs to be completed if the objective has already been meet or is no longer relevant to the business.
It is recommended this be reviewed every 6 months at a minimum, preferably monthly when there is a high amount of activity.
Hints and Tips
- Set a budget that is achievable
- Be clear on your objectives and what you would like to achieve
- Measure actual spend vs. budgeted spend
- Compare effectiveness of different spend (i.e. compare the cost of conducting various marketing activity)
- Compare the cost of outsourcing all or part of the process to a business like Feedsy
- Always obtain more than one quote to ensure you are getting the best price
- Re-use material if still relevant vs. spending more money on new pieces of material that may no longer be relevant
- Ensure your marketing spend is relevant to the return the customer delivers to your business.