+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
While the spring and summer rally on Wall Street and the various proclamations from many leading U.S. economists declaring the end of the recession give reason for optimism, the truth is that the marketing spend will remain tight for months to come, possibly well into 2010. And guess what? The smart and the savvy will flourish during these tough times. They’ll win mindshare—and, more importantly, market share—by remaining nimble and establishing a maniacal focus on investing only in marketing resources, whether internal or external, that will deliver results and drive the all-important top line. Even better, they will do so cost-effectively.
So given the current environment, where should CEOs and executives of small businesses be making their marketing investments now? Before you start seeking answers, it’s best to go back to your business plan and examine your sales forecast amount. Then consider the following steps:
1. Allocate roughly 10% to 12% of gross sales to marketing, and then adjust for key factors such as new category creation, a product/services launch in a crowded category, and infrastructure costs.
2. Reconsider staffing plans and determine if you might be able to get the services you need from a low-overhead outsourced provider.
3. Determine high-priority events such as trade shows and conferences. Then think hard about what you can do virtually—such as Webinars or white papers. They are proven, cost-effective lead generation and thought leadership vehicles.
4. Estimate lead generation program costs based on the number of leads needed to close a sale.
5. Estimate the number of impressions you need to draw in the correct number of leads and put together a budget based on average cost per impression for your audience.
(Stats to live by: Industry median response rates for direct mail = 1%; industry median response rates for e-mail = .3%; estimated lead close rate for a B2B product priced between $35,000 and $100,000 is 1 in 100.)
It sounds simple, but it is surprising how many companies ramp up their marketing and PR programs without having gone through this type of exercise.
BluePoint Venture Marketing
Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.
To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.