Monday, May 16, 2011
Question: How much should your organization spend on marketing? (Are you thinking this is a trick question?)
Answer: As much as you need to.
If that is the answer to the question, how do you determine your marketing budget, and how can you tell that you’re getting the return on investment that you need?
Tighter and tighter budgets have made investing strategically more important in recent years, so it is vital to ensure that your marketing budget supports a marketing plan that is clearly aligned with your organization’s strategic goals. Too often, we see organizations spending money on marketing without a plan or goals for what those marketing efforts will achieve. You can’t invest simply on instinct.
At the outset, you should establish exactly what you want to achieve through your marketing efforts – New consumers from a different geographic area? More consumers for a specific service line? Greater brand recognition outside of your community? New referral sources? Once you have set these goals, you can establish a variety of metrics that can help you to determine the return on your investments.
The acid test for marketing budgets is that they should tie to revenue – and have a projected impact on your revenue in the years ahead. Reducing your budget for proposal writing should reduce your projected revenue (via your estimates of the number of proposals written and won). Reducing your budget for web site and social media communication should reduce your projected revenue (via reducing the number of referrals that your program will receive). And on and on…
To learn more about the importance of measuring your marketing success, join me for my session, “Marketing Investments that Measure Up: An ROI Formula to Align Your Marketing Budget with Operational Objectives,” on June 17th in Baltimore at the 2011 OPEN MINDS Planning and Innovation Institute.
Aida Porras, M.A.
Senior Associate, OPEN MINDS
For more on marketing from the OPEN MINDS team, see: Get Marketing Leverage With Web Marketing & A Social Media Plan all members
This is free for the next sixty days to all registered OPEN MINDS Circle members.