How to set an effective marketing budget for your small business

marketing budgetSetting a realistic marketing budget is essential for SME’s

If you are a small business owner and haven’t yet got around to planning your marketing and marketing spend for the year ahead then now is the time to get started.

You may feel that creating a marketing plan and setting a marketing budget is a time-consuming exercise and only really useful for  businesses with extensive marketing departments and large budgets. On the contrary, taking the time to put together a marketing plan and marketing budget now will save you time, money and potential headaches later on in the year.

It is just as important that as a small business owner you plan the best way to spend your budget and that will mean putting precious time aside to do just that. A smart budget will help you make the most of a small pool of money by planning and tracking spend to ensure wastage is kept to a minimum – essential, if like most small businesses owners you need to make every penny count.

What should I set as my marketing budget?

According to the SBA (US Small Business Administration) the average marketing budget for small businesses lies somewhere between:

2-3% of sales for an up and running business

3-5% of sales for a start-up business

Essentially though it comes down to your own individual business. An effective marketing budget will be a combination of the following factors:

  • What you can afford?
  • What time you can give (are you planning to outsource or will all the marketing be done by you)?
  • Accurate reflection of a well thought out marketing plan

So before coming up with a figure, first take some time out to plan and think about the following questions: How is your business performing at the moment? What could you do better? What is it you want to achieve in the year ahead?

smart budgetThe importance of marketing planning

Planning is absolutely essentially to creating an effective, controlled marketing budget. It will eliminate waste and ensure you are making the most of your marketing spend.

A simple model to help get you started planning is the  SOSTAC model (Situation Analysis, Objectives, Strategy, Tactics, Actions and Control)which essentially helps you plan by looking at the following questions in regard to your business:

  1. Where are you now
  2. Where do you want to be?
  3. How do you get there (strategy)?
  4. How exactly do you get there (tactics)?
  5. Details of Tactics – who is doing what and when
  6. How will you monitor performance? 

Of course how detailed you go in your marketing plan is up to you and will probably depend on how much time and resources you have available. But by following a marketing planning model such as this and thinking about the questions it raises will help you focus on the best way to drive your business forward.

setting a marketing budgetHow to put together an effective marketing budget

An effective marketing budget is essentially a smart budget that gives you flexibility, keeps you in control of your spend and results in very little wastage.  Your marketing budget is an integral part of your marketing plan and helps you outline the costs of achieving the goals you have laid out within the timeframe you have planned.

Of course the budget you set will depend on what you have to spend and what you are trying to accomplish as a business. A marketing plan and marketing budget will help you stay savvy and smart in the way you spend you money. Monitoring and maintaining your budget will help give you flexibility in terms of spending by enabling you to cross check your results against spend. For example if a promotion isn’t working you can stop it and quickly move your spend over to a more effective activity.

Considerations: What should you include in your marketing budget?

This is why marketing planning is so critical, if you’ve properly planned for the year ahead then you should have everything covered. Your marketing budget should be broken down to reflect the details of your marketing plan. Here is a bit of a checklist to help get you started. It is in no way exhaustive and some activities won’t be relevant to your business but it will get you thinking of all the different areas you may need to cover to avoid any nasty surprises from unexpected costs.

  • Marketing promotions
  1. Email
  2. Mobile
  3. SEO – paid and organic
  4. Advertising (online and offline)
  5. PR
  6. Sales promotions
  7. Blogs
  8. Social Media
  9. Direct Mail (printing and postage costs)
  10. Sponsorship
  11. Affiliate marketing
  • Outsourcing copywriting, agencies, freelancers, fulfilment bureaus
  • Events – do you intend to attend any exhibitions or trade shows
  • Market research
  • Design (designers, photos and images)
  • Sales promotions (discounts offers , promotional mugs etc)
  • Website Design and maintenance

And remember there are always unexpected costs that crop up so putting some contingency aside is not a bad idea.

Marketing Budget Templates

There are plenty of useful marketing budget templates you can find online to use as a guide – from basic to all singing all dancing spreadsheets. I’ve added a few links below to templates I have come across online that you may find useful.

Microsoft Office Marketing Budget Template

Hubspot 8 Free Budget Templates

Entrepeneur Marketing Budget Excel Template and  Guide

Brandeo Marketing Budget Template

Sharpmind Marketing Budget Template

Alternatively create a  simple excel spreadsheet yourself outlining your planned marketing spend for the year ahead. A simple, effective way to monitor and control spend is to have a monthly breakdown of planned marketing activities with estimated costs against actual costs. This way you can have a clear analysis of spend against activity and can quickly see where you have overspent , underspent and enable you to monitor your potential ROI for each activity.

Don’t forget an effective, well thought out marketing budget enables you to spend smartly and get the most from your hard-earned money.

 We’d love to hear your thoughts and experiences on this subject, so please do leave a comment. 

  1. Budget image courtesy of Stuart Miles at FreeDigitalPhotos.net
  2. Calculator image courtesy of Pong at FreeDigitalPhotos.net
  3. Brain Thinking image courtesy of samuiblue at FreeDigitalPhotos.net
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How small businesses can plan for a profitable online Christmas

online christmas salesChristmas is one of the most important times of the year for many online retailers.  December 2013 saw UK shoppers spend a record £11 billion online – a year-on-year rise of £18% . So considering as a nation the Brits spent £91bn online in 2013  and are anticipated to spend £107bn in 2014 , Christmas 2014 looks set to be another profitable period for e-commerce.

If you haven’t already started planning for the Christmas period, then now is the time to get organised. You don’t want to risk losing out on those lucrative seasonal sales just because you haven’t planned ahead.

What will consumers be doing?

Trends indicate more and more people will be shopping online this Christmas.  November and December are still likely to be the key shopping months, but don’t forget a significant number of consumers start shopping in September and October.

  • In the UK 61% of people said that they completed more than half of all their Christmas shopping online during 2013
  • Online sales in 2013 grew by a staggering 19.2% compared to 2012.
  • In 2013 the majority of consumers (49%) planned to do their Christmas shopping in the months nearing Christmas – particularly in November or beginning of December, 27% and 22% respectively.
  • 30% of consumers expect to start holiday shopping before Halloween
  •  22% of women had already started their Christmas shopping by September or October in 2013
  • 28% of women  ‘do their Christmas shopping early to avoid stress’.

importance of planning aheadWhy and what should you be planning now?

So, if time has slipped away from you (as it often does when you are managing your own business), don’t worry it’s not too late to start planning your Christmas activities. Although early bird shopping may have commenced, the busiest sales period is still to come.

Don’t underestimate just how useful an exercise planning is. Putting time aside now to work out all your seasonal activity will save you both time and stress in the long run. A plan helps you keep on track and alleviates the need for any last-minute, poorly executed and panicked promotions. It also serves to inform other members of staff of what is happening and when – keeping all of you singing from the same songbook.

Promotions – put together a schedule of planned activity

Decide on what christmas promotions you intend to do and then put together a schedule of activity. For example supposing you want a special offer to go out in time for this year’s Black Friday and cyber Monday (28th November and 1st December respectively) then schedule in the day your activity needs to go out and work backwards from there. You can then calculate when you need to have all your preparatory work completed.

Get started now on planning your promotions:

Christmas offersSeasonal offers

Offers are a great way to pull customers in over the Christmas shopping period. By our very nature we love a bargain, so think about planning some special yuletide promotions such as:

  • By one get one half price
  • 3 for 2
  • Free delivery
  • Early bird incentives – such as 15% off

Tip: If you’re not 100% sure what offers you going to do then you can always do a teaser for customers. For example, Check out Argos. They have already set up a separate webpage for their Black Friday and Cyber Monday deals for customers – without stating the exact details of what their offers will be.

Email, social media, advertising, blogs

Whatever offers you decide upon, then you need to schedule when you want  your promotional activity to hit. How are you going to tell everybody about all the great products and offers you have if you don’t shout about them from the rooftops in time? So plan in when you are going to send out your promotional emails, publish your festive blogs, launch your promotions on your websites and social media networks and if and when you are going to advertise.

Sales platforms – what are you going to need to tweak

Getting  customers into the right mindset can really help your sales conversions. So think about how you can ‘Christmas up” your sales platforms.

Website: Making your website Christmas friendly is essential. Inspire customers as much as you can by showcasing products that you think will make perfect gifts. Make it easy for customers to find things – try categorising headings such as; stocking fillers, gifts for children, gifts for her, gifts for food lover or gifts for under £15. For ideas on how to get your website ready for the festive season check out some online businesses that do Christmas well like notonthehighstreet.com.

Open a Facebook shopFacebook store: If you haven’t already got one set up, then now is the time to  create a Facebook shop and give yourself an additional sales channel for your products in time for Christmas. With 1.23bn monthly active users, a Facebook store offers a cost-effective channel for small businesses and start-ups to sell directly to an engaged audience in an environment in which potential customers are actually interacting in the here and now.

Multi device friendly: Mobile and tablets play an increasingly important part in a consumer’s purchasing journey. 

“Mobile phones and tablet computers are now used for nearly 6% of all retail sales as Brits embrace shopping from the sofa, the train and under the duvet” The Guardian 2014

December 2013 saw online sales via mobile devices double from the previous year to £3 billion.  With the trend likely to continue, if your website is not already multi-device friendly then now is the time to get it sorted.

Landing pages: Don’t forget to plan in appropriate and relevant Christmas landing pages. If you’re sending out specific yuletide offers and promotions, make sure your message is carried right through and reflected on the landing page. Your landing page has a significant impact on your conversion rate so make sure you don’t just send customers through to a bog standard home page. Make sure it reflects the content of your Christmas promotions – otherwise all your hard work and planning could be wasted. 

christmas stock and resourcesStock levels and resources

If you’ve identified products from last year that sold particularly well or have products you are confident are going to prove popular, make sure that you’ve got enough stock in to fulfil any Christmas orders. This way you can rest assured that any seasonal lifts will be catered for. Equally if you feel you are likely to experience a large increase in orders then decide whether you will need any extra help to manage the fulfilment and despatch. If you think you will struggle then have a plan in place to get more hands on board when you’ll need them – whether that means pre-warning family and friends that they may need to be roped in to help or hiring in temporary seasonal staff. Essentially be  prepared!

prepared earlier‘Here’s one I prepared earlier’

Finally, if you know that the Christmas period will be hectic, have a think about what you can do now to get yourself a bit ahead. This will save you a great deal of time and stress during those really busy periods. For example:

If you have a regular blog write extra articles now, in advance. They are then sitting ready to published when you need them.  The same goes for emails and newsletters. There is no reason why you can’t them prepared in advance when you have a quieter moment.

Just by thinking ahead and planning in advance you can avoid any nasty surprises and keep your stress levels lower. And if you really have no time at all then think about some seasonal outsourcing – it may well be worth it in the long run!

Further reading for some more Christmas tips:

 

We’d love to hear your thoughts and experiences on this subject, so please do leave a comment.

 

Small business guide to marketing plannning Part 5: Implementing and measuring performance

triple jumpMaking it happen and measuring your performance

To conclude our ‘Small Business Guide to Marketing Planning’ series, we look at the final two stages of the SOSTAC marketing planning process – Action and Control. Action is the who does what and when of the Tactics (examined in Part 4 of this series). Control is how you measure your performance. How successfully have you achieved what you set out to do in your objectives?

Action – Who does what and when

The ‘Action’ element of the SOSTAC  is essentially the details of your tactics. It involves thinking about the specifics and practicalities of implementing your plans. You need to think about:

  • Tasks: What actually needs to be done? Think about all the tasks that need to be implemented in order for you to roll out your plans. For example, if you were planning  a series of traffic driving promotions in order to grow your prospects database, then what development needs to take place on your website first in order for you to data-capture the new names coming in? You need to think about all the tasks that your plans entail.
  • Resources: Who is going to be responsible for what? Will you need to outsource or bring in any external agencies?
  • Timescale: What timescale are you working to? What are achievable and realistic deadlines for your tasks?
  • Budget: Make sure you are aware of all the potential  costs – website development, promotions, design and so on.

There is no use having a wonderful strategy and great tactics if you haven’t looked at how and when you are going to get your plans underway. You need to think about your available resources and consider what is a realistic timeframe. Outlining exactly who will be responsible for what and setting agreed deadlines will help ensure your plans are rolled out successfully and within the timeframe dictated by your objectives.

desk calendarSchedule

Creating a schedule is the best way to ensure everybody is clear about who is responsible for what and what the agreed timeframes are. Remember, if  a task falls behind schedule it is likely to have a knock-on effect on all your other deadlines.

You can easily put together a perfectly adequate schedule on excel – just remember that it is a working document and should be kept updated, referred to and amended accordingly as your plan progresses. Outline each task, who is responsible and what the deadline is. Circulate your schedule to everyone involved (this includes external resources if you are outsourcing) as it will ensure there is no confusion about who is taking responsibility for what. And, even if you are a one-man-band and planning on doing it all yourself, creating a schedule is still important as it provides a useful and detailed action plan for you to work to.

Control: How do you measure your performance?

It is really important to be able to ascertain whether you achieved what you set out to in your objectives. And, if you haven’t achieved specific targets then it is essential you understand why. Otherwise, you risk repeating unsuccessful tactics over and over again wasting valuable time and money. It is only through measurement and analysis that you can understand how to improve on your performance.

So, first you need to decide upon how you intend to measure your performance. What KPI’s (Key Performance Indicators) do you intend to use? Of course this will depend on what your objectives were, but could include analysing  RoI, number of new leads, conversion rates, traffic sources, new visitors to your site, page impressions and so on. Think about what are the most suitable metrics and measurements to enable you to assess the success of what you have undertaken.

Web Analytics

As an e-commerce site it is inevitable that some of the measurements you will be using will be web analytics. This is why it is important to get to grips with some of the common metrics – they can tell you an awful lot about your business!

“Web analytics is essentially about monitoring how visitors are using different pages and features on your website” (EConsultancy, Web Analytics: A Beginner’s Guide)

Web analytics are useful metrics to help you better understand your performance – in terms of both your website and response to specific campaigns. There are many useful metrics but if you are just starting out then the ones listed below are probably the ones to familiarise yourself with first.

  • Traffic source: This tells you where your traffic is coming from – through direct traffic (existing customers, offline campaigns), search engines, referring sites or campaigns (email, banner ads, social media campaigns and so on)
  • Visits: Basically how many visitors are coming to your site. You can find out the percentage of new and repeat visitors.
  • Page views: Number of page views can be an indication of how engaged your visitors are by telling you an average of how many pages they visited. You can also find out the average duration of visits.
  • Bounce rates: This is often used to measure the quality of traffic coming to your website. It tells you who visited only one page of your site and then left immediately. Take a look at Avinash Kaushik’s article on just how useful bounce rate can be.

If you are just starting with web analytics then there are a lots of helpful free resources available. We like:

Customer satisfaction

Of course don’t forget there are other more qualitative ways to measure your performance. Customer feedback can be invaluable. Monitoring customer satisfaction through taking note of customers views and opinions can tell you a lot about how your performance through the eyes of your customers.

ShopIntegrator’s Small Business Guide to Marketing Planning

This is the final part of our Small Business Guide to Marketing Planning. Hopefully we’ve been able to show you that by using a simple marketing planning framework like SOSTAC, you can create a useful and relevant working document. We really believe that investing time and effort into putting together a marketing plan for the year ahead will pay dividends in the long run by helping give your business clear direction and focused objectives  in order to move your online business forward.

  • Part 1 : Introduction to Marketing Planning and the SOSTAC framework
  • Part 2 : Situational Analysis: Where are you now?
  • Part 3:  Setting Objectives and formulating Strategy: Where do you want to be and how do you get there?
  • Part 4: Tactics: How exactly do you get there?

Triple Jump © Denys Kuvaiev | Dreamstime.com

3D desktop calendar image courtesy of Renjith Krishnan at FreeDigitalPhotos.net

We’d love to hear your thoughts in this post, so please do leave a comment.

Small business guide to marketing planning part 3: Objectives and strategy

world map and compassTo give your business direction and enable it to move forward, you need to have a clear idea of your goals, objectives and strategy . You may have a general idea of where you’d like your business to be in one, two or five years time, but without setting specific targets you may find you lose track of where you’re going and have no way to measure the success of what you are doing.

So, welcome to part 3 of our small business guide to marketing planning. In Part 1, we  looked at the importance of marketing planning and how using a framework such as SOSTAC can help you build your small business marketing plan. Part 2 discussed the first step in marketing planning – situational analysis and examined the question ‘Where are you now?’ This post looks at the importance of  setting objectives and how to formulate your strategy by thinking about ‘Where do you want to be?’ and ‘How do you want to you get there?’

Where do you want to be?

Having undertaken your situational analysis you should have a pretty solid idea about where your business currently stands. You’ll have a good understanding of your customers, the marketplace and your competitors.  You’ll also be aware of  your business’ strengths and weaknesses, alongside any opportunities or threats that may be on the horizon. All this analysis will help you mould your goals and objectives. These may include wider, long-term goals such as your business mission and vision as well as more specific short to medium term objectives.

So for example; say your situational analysis has identified that one of your weaknesses is that you have only a small database of prospective clients,  one of your goals over the year is likely to be to grow your database. Put into a specific short-term objective that you can focus your strategy and tactics around, your objective could be something along the lines of:

  • To increase ‘prospects database’ contacts by 25% by 30th June 2014.

SMART objectives

To make you your objectives both useful and relevant, you need to make them SMART. This way it is clear to everybody what the target you are progressing towards is.

  • Specific – objectives should be detailed and specific to a particular area – not vague or wishy-washy as that will make them impossible to measure.
  • Measurable – the objective should be able to be quantified.
  • Achievable – is the objective likely to be achieved or have you overestimated targets?
  • Realistic – do you have the resources, time, budget to make the objective happen?
  • Timely – you need to have a specific target time frame to work to.

How do you get there?

Now you know ‘where you want to be’ through setting clear goals and objectives, you need to think about how you’re going to get there. Strategy is driven by your situational analysis and is essentially about how you intend to go about meeting the objectives you’ve set.  So in our example our objective was to increase the number of contacts on our database. Therefore we are likely to want to drive more traffic to our website, which may well mean improving our search engine visibility and ranking. Our strategy will be thinking about the best ways to do this. This may include looking at:

  • Customer segmentation and target marketing strategy. Probably the key element when formulating your strategy is your customers and segmenting them into clearly defined customer groups by identifying the different behaviour and needs of each group. You will have looked at segmenting your customers as part of your situational analysis, so your strategy should then focus on how you intend to target your marketing to each customer segment.
  • Your positioning and OVP ( Online Value proposition): Where is your business positioned within the market and what is it that makes your e-commerce offering stand out from your competitors? How can you exploit this to your advantage?
  • Content strategy:  So if your strategy is to drive traffic to your website,  you will want to improve your search engine ranking and therefore you will need to look at SEO (search engine optimisation) . Content is absolutely central to SEO And so you will need to think about ways to improve your online content.

Your strategy is all about what actions are you going to undertake to ensure you achieve you objectives.  Your next step will be defining the tactics you are going to use (the tactics element of the SOSTAC framework will be part 4 of our marketing planning guide).

So, how does all this fit into the SOSTAC framework?

Going back to our earlier example objective of growing our prospective database, lets look at it in the context of the SOSTAC  framework :

Situational Analysis

1. Where are you now?

SWOT analysis  identified that the current prospects database was poor

Objectives

2. Where do you want to be?

SMART objective: To increase ‘prospects database’ contacts by 25% by 30th June 2014

Strategy

3. How do we get there?

 Strategy: To drive traffic to our website in order to data capture new names and achieve our objective of growing our prospects database by 25%.

Tactics

4. How exactly do we get there?

What marketing tactics will we use in order to drive traffic to our website and data capture new names for our database?

Actions

5. What is our plan – who is going to do what and when?

Who is taking responsibility for our tactics. What is the schedule and timeframe required in order to meet our objective’s deadline? What is the budget? What resources do we have?

Control

6. How are we going to measure our success?

We need to be able to measure our performance through analysis such as, KPI, web analytics, conversion rates in order to be able clearly measure whether we have met our objectives.

Part 4 of our Small Business Guide to Marketing Planning will be looking at marketing tactics.

Image courtesy of Keerati at FreeDigitalPhotos.net

We’d love to hear your experiences and thoughts on this post, so please do leave a comment

Small business guide to marketing planning : part 1

marketing plan conceptWelcome to 2014. It’s the start of a brand new year and now is the time to start planning your marketing activity for the year ahead.  

We realise it’s not always easy to discipline yourself to put time aside for planning. Small business owners often have to juggle multiple roles, and planning can feel like it’s just one more thing to add to the bottom of a long of list of priorities – and before you know it you’re already halfway through the year. However, we firmly believe that putting some time aside now to plan your small business marketing strategy for the year ahead is well and truly worth the time and effort you put in.

Over the next few weeks, we’ll be looking at each of the elements that make up a successful marketing plan in more detail. First though we’ll look at why creating a marketing plan is so important for SME’s.

Why a usable marketing plan is so important for small businesses

Spending time planning your year ahead will actually help you focus on the areas that will help drive your business forward. By the end of the process you should have a relevant, useful working document that you can refer to time and time again over the course of the year. A good marketing plan will:

  • give your business direction through creating clear goals and objectives
  • help you to better understand your customers, online environment and competitors
  • help you put your resources and budget in the right places
  • provide a marketing strategy and plan of action for the year ahead
  • give you benchmarks by which to measure your performance.

How to write a marketing plan

How formal and structured you maker your marketing plan is  up to you. It  will depend on your business and the time and resources you have available. However at the very least you should consider and each of the areas we’ve outlined below as they’ll help you formulate your strategy and marketing activity for the coming year.

There are plenty of useful marketing planning models – marketers all  have their own particular favourites. In this post we’ll be using SOSTAC as it is a simple, useable framework to structure your plan around.  The SOSTAC model was created by Paul Smith in the 1990’s and is still one of the most widely used and popular models for marketing planning.

SOSTAC marketing planning model:

Situation Analysis – where are we now?  This is where you review your current environment to give you a better idea of where your business currently stands – what the current opportunities and threats are.  Situation analysis involves undertaking some marketplace, customer and competitor analysis enabling you to gain a better insight into your current situation and help you focus on where you want to be.

Objectiveswhere do we want to be? Setting clearly defined goals and SMART (Specific, Measurable, Achievable, Realistic, Timely) objectives will enable you to focus your marketing strategy to support your overall business strategy and business objectives. For example, if growing your online sales by x% is one of your business objectives this year then a key marketing objectives is likely to focusing on increasing traffic to your website.

Strategyhow do we get there? Your marketing  strategy essentially defines how you will achieve the marketing objectives you have set out. For example how you will position yourself in the market place and differentiate yourself from your competitors, and how you will segment and target your market.

Tactics exactly how do we get there? Tactics are simply the tools you use to achieve your objectives and support your marketing strategy. Tactics are essentially based around the 7ps of the marketing mix (product, promotion, price, place, people, process and physical)

ActionsWhat is our plan? Actions are the specific details of the tactics you have decided upon –  essentially who, when and how you intend to implement them. This often involves putting together of schedule of actions, budgets, timeframes and responsibilities.

Controlmeasuring success?  Control is how you intend to monitor the performance and evaluate the effectiveness of your marketing, using measurements like web analytics, customer feedback, sales, conversion rates and so on.

We’ll be looking at each of these elements in more depth over the coming few weeks so by the end of the process you should be able to create a useful marketing plan that supports your overall business objectives and gives direction to your marketing activity over the coming year.

Marketing Plan Book image courtesy of Stuart Miles at FreeDigitalPhotos.net
 

We’d love to hear your experiences and thoughts on this post, so please do leave a comment

Online objectives – drive traffic, generate new customers,  retain existing customers,