Rethink Your Marketing Budget
Almost every professional and entrepreneur I meet wishes their marketing could be like a vending machine. Stick the right amount of money into the slot and receive the wonderful goodies which are promised. Unfortunately, marketing doesn’t work that way. It’s more like the stock market. There are good investments, mediocre ones, and bad ones. It’s just hard to know in advance which investments will work and how well they will work. However, wisdom is knowing when to dump the bad ones and when to invest more into the good ones, based on the economic and market cycles currently at work.
When you start thinking of your various marketing initiatives as if they were stocks within a portfolio, it becomes easier to evaluate them. You certainly don’t want to put all your eggs in one basket because that carries too much risk. You must diversify your efforts so they can all work together to optimize the performance of your portfolio.
It’s important to recognize, however, that you must periodically rebalance your marketing portfolio. Over time, some duds must be removed and some new opportunities added. The world never sits still and you cannot afford to stay in momentum mode by resting on your past successes. To keep your competitive edge, you must force yourself to rethink critical tactics on a regular basis. Place a review of your marketing investment portfolio on the calendar at least once a year; if not more often.
How do you evaluate your marketing portfolio? First make sure you have a diversified portfolio. Just as financial advisors encourage a blend of domestic and international stocks and bonds, break your marketing portfolio into clusters for Buzz (word of mouth), Publicity (earned media), Advertising, Direct Promotion, and Referral (influence) campaigns. Within each cluster, evaluate the ROI of your various initiatives over time. How do they compare? Is there anything that should be removed? Are there new tactics available that should be added and tested?
Once you have your portfolio rebalanced, the next step is to distinguish between performance capital and risk capital. The performance capital investments are those tactics that continue to provide reliable and predictable results. The risk capital are investments you make into new tactics that appear to have considerable upside potential. Not all risk investments will pay off as hoped, but some will produce profound results and perhaps justify further investment down the road.
Here’s one final thought on the process of rethinking your marketing budget. Momentum can be a dangerous mindset. The bigger a company grows, the more likely momentum gets in the way. So, as you step into your budget planning process, start by figuring out what you can STOP doing so you can concentrate on what you SHOULD be doing.
