Trying to work out how to best use precious financial resources is key for micro business owners who want to ensure they are getting the most out of their spend.
It’s the time of year where many teams will be finalising a marketing budget – an invaluable exercise for the next financial year. We are always talking to our clients about return-on-investment (ROI) and how to aim to measure this best. For business owners that trade online, this is so much easier than it is for those running more traditional firms.
When talking to the various agencies your business may work with it is so important to review success measures annually, if not more often – as technology for tracking is always improving. Between your business and any third parties you may be working with you need to agree what success looks like and to what level you can measure return, which will be different for the varying types of marketing your business may conduct.
For online, there should be ways to monitor ROI quite precisely, as at all times you should be able to track where a user has come from, the key is often once an enquiry hits the business ensuring that it is tracked in a way that marketing can report on.
The questions I always urge clients to be asking agencies are:
- How would you measure success, what should we be expecting and in what timescale?
- Is our budget effectively split across different types of marketing, or could we increase return by changing our investment?
- Is our budget realistic for achieving our business goals? This question is key as it is so easy sometimes for agencies to take your money and not actually be honest back and say that really to reach what your expecting to achieve you need double the investment. It always seems like a difficult discussion to have, but honesty is the best policy
Budgeting and ROI discussions all need to be based around managing expectations and that is on client side and agency side. So often clients and agencies play games around “who will show their hand first” when it comes to budget available vs. agency suggested budget.
It is so much better to start a conversation early with budget available, as the agency can be a lot more realistic in their suggestions if they understand what they are working with. Plus also, they can immediately say either way if the campaign/business goals are going to be likely to be achievable within that budget.
Something we often see crop up is that when a big project needs completing budget gets moved to fund that project, which then in turn means a reduction in results. For example we had a client drop all budgets to minimal amounts for a year to fund their new website, but then this great new website was lacking traffic – as all other means of marketing had been held back. So it is important to not just be planning for the year ahead but be planning for the next five years, so that if you can see a large project on the horizon you can plan for this ahead of time and ensure you have secured additional budget.
Your agency contact should be able to help you in putting together the business case of additional budget – remember this budget is really important to them as well so ensure you utilise their help wherever possible.
The absolute main takeaway from this article, though, is to challenge the agencies your business works with, keep pushing as you need to ensure that for your spend you are getting the right results. Make sure that budgeting is not a simple copy and paste from last year plus add a bit, that you really take the opportunity to ensure your split of spend is correct and that it is going to be the best strategy for your business for the next 12 months.
Finally, make sure you have some contingency. Something always crops up that you haven’t planned for – so ensure there is a little pot there you can use if the need arises.
To find out how smart thinking can help you grow your marketing budgets, check out this handy guide.
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