Marketing planning pays big dividends

There are so many “truths” in marketing that you could create a virtual library of book titles. But some truths seem to be more reliable than others – especially as the landscape of communications technology shifts and changes in dramatic fashion.

One marketing axiom worth living by is that careful planning of marketing activities, strategies and positions saves time, effort and money on the part of your in-house team and the outside professionals who help you build value into your brand (for fun and profit). Steve McKee (from McKee Wallwork Henderson) touches on this in his BusinessWeek article: Sow Now, Reap Later.

McKee encourages companies to take the long view on planning and to invest a significant amount (20-50%) in creating a campaign that delivers both short- and long-term results. That might sound a bit extreme to some business owners, especially those who have been around the block a few times, but there is a rational, business-oriented explanation of the benefits resulting from a deliberate, planned approach to marketing.

Consider some of the common mistakes made by most companies when it comes to setting marketing budgets or determining marketing/advertising strategy:

1.) Companies set their budgets as a percentage of sales. This is a common practice among many sales-driven B2B marketers. Why isn’t it effective? Because this method of setting budgets fails to take brand momentum (in existing markets) and brand inertia (in new markets) into account.

2.) Companies set their budgets according to what they spent last year. This is the number one problem for most small businesses who can’t understand why they’re not growing like their larger, better funded competition. Setting budgets to last year’s level is usually just the first step in doing everything “just like last year.” The problem is, however, that the market is not the same as last year. Marketing programs rarely work better the second time around.

3.) Companies set their budgets at a fixed level over last year to reflect increased costs or projected sales growth. Ok, this is a little better (but not much). To call this “planning” is a misnomer. This only goes half way and is really nothing more than a budgeting maneuver. You will still need to work through the communications issues facing your brand(s) in each market to figure out where the money should go and what you should say.

4.) Budgets or plans are set according to planned new product introductions. Still a little better, just not all the way there. After all, what happens if there’s a product recall or if the competitive landscape shifts due to a new product introduction by a rival brand. B2B marketers get their budgets blown out of the water all of the time by planning this way.

5.) Major marketing programs (e.g. co-op/distributor programs) are cut because of under-utilization over the prior year. I’ve included this because it is indicatave of reactionary planning in many mid-sized and large OEM companies. Legacy programs, especially co-op programs, grow organically and require maintenance. Sometimes that maintenance is more like a good weed wacking than a trim around the edges. But cutting a program out entirely without the benefit of research into the attitudes and opinions of the affected market is a huge mistake.

One thing all of these approaches share is a failure to understand the market/markets they are intended to address. Research is a key part of the planning process (just as it is a key part of the product development process). Asking distributors, retailers and customers questions and review prior years’ data are just two of the many research projects that can yield critical insights into marketing obstacles and potential communications problems.

So, what should you do?

First, start with a clear understanding of where you want to end the year (assuming you budget and plan on an annual basis).

Next, do the research to identify all of the major issues and obstacles in your way. What’s going to hold you back?

After that, determine the financial benefit of making it to your stated goal/objectives on time. What’s the bottom-line impact if you’re an unqualified success?

Next, decide how much of an investment you’re willing to make in a solution that will get you there. This is how you set your budget. It should be determined by what kind of ROI you hope to achieve as a result of your marketing efforts.

Finally, once the budget and timeframe are set and the obstacles to success identified, brainstorm and come up with the best possible way to get from where you are to where you want to be.

Chances are you’ll get there more efficiently than before and learn some new things along the way.

Consider it a dividend.

Ad Strategies: Sow Now, Reap Later