Why You Shouldn’t Set a Monthly Marketing Budget

Remember, start with the end in mind.

Being efficient with your marketing, i.e. getting the maximum amount done in the shortest amount of time, is pointless if you don’t know why you’re doing it or if it’s effective. Not knowing what’s really important to you and what you’re working towards is like climbing a ladder which is set against the wrong wall.

What is the end goal with your marketing? To increase clients? Gain exposure? Develop your product? Or something else? Once you know WHY you’re marketing, you can learn what it takes to get there.

This blog is for those who want to close more clients, increase the number of qualified leads, free up time while increasing productivity, and reduce your marketing expenses – all at the same time.

This scenario is not reserved for elite companies. However, companies often become elite by achieving it. Here’s how:

Optimize your marketing spend on a per client basis, not per month.

Companies – even very smart ones – often set a monthly marketing budget. At the end of that month they review the results, eliminate tasks with low results and increase the tasks that are working. This makes sense at a basic level. However, depending your type of business it can be very difficult to gauge what’s actually working on a month by month basis.

Let’s say that you have a service-based business with a high client lifetime value and a long sales process – let’s say 6 weeks. You don’t know exactly which marketing techniques will bring you one new client, but you’re testing a bunch of ideas to generate leads and hopefully close more sales. The only thing is, how can you reevaluate after 4 weeks if it typically takes 6 weeks to close a client?

“Many people work towards meaningless goals. They worry about being efficient rather than being effective.” – Stephen Covey, Author of 7 Habits of Highly Effective People

Ask yourself, “What does it take to get one client?”

For most service-based businesses, your objective is to increase sales. So the first question you should be asking is what does it take to get one client? The answer to that is the only way to truly optimize your marketing time and money.

When you know exactly what it takes to get one client, you can repeat that process to get two clients. And then three, and four, etc. This is the best and most efficient way to scale your business.

A common mistake that many businesses make is getting stuck on leads. What does it take to get more leads? They go in circles trying to optimize a marketing budget to get more leads next month. But if you don’t know how many leads it takes to get one client or from where your clients are coming from, then you’ll have difficulty optimizing your marketing efforts.

For instance, let’s say your marketing mix includes paid advertising, video marketing, referrals, events and blogging – each of which give you various amounts leads and prospects. You count the number of clients you’ve closed in the past 6 months and discover that 80% of your clients are coming from referrals and 0% from blogging. You also recount your hours and determine that you’re spending more time creating quality blogs than polishing your referral program. Not only that, you also realize that your budget to outsource writers and promote your blogs on social media is not actually bringing you results, a.ka. clients.

In this case, your marketing efforts are holding you back a great deal. And this is insanely common for companies everywhere! Trust me, I’m as shocked as you are. Setting a monthly marketing budget is an old school way of thinking, or for companies who have a proven client acquisition model.

Refocus your efforts on the marketing strategies that are actually bringing you clients (or your desired results), optimize your budget and time based on this key metric and eliminate the rest.

You’ll thank yourself later.

“Continuously ask yourself, ‘What 20% of sources are resulting in 80% of desired outcome(s)?’” – Tim Ferriss, Author of The 4-Hour Workweek

An afterthought…

Are sales and marketing working together?

Many businesses don’t have amazing cross-functional departments. I’m talking about the sales department or team and your marketing department. Typically, these two are working to optimize efficiencies in their own departments instead of sales and marketing as a whole.

The question these two departments often DON’T ask collectively is, “What does it take to get one client?” Often times they don’t prioritize what is important to the company instead of what is important to their respective departments or teams.

Click here to get started working on the ROI of your brand now: http://smithdurant.com/get-started/

SHARE THIS POST

Leave A Comment