|
Planning
ahead is a measure of class. The rich and even the middle class plan for
generations, but the poor can plan ahead only a few weeks or days.
- Gloria
Steinem
The Time
Factor
(1980)
|
|
Establish a
Marketing Budget
Establishing
your marketing budget means examining every distribution channel and valuing
your investment. Ask yourself some questions
-
How
much am I spending in each marketing area and what is my return?
-
What would happen if I advertised 10% less or 10% more this year?
-
Where are the new opportunities and markets?
-
What is my competition doing?
-
What are the long-term effects of not exhibiting at a particular trade show? Can I accomplish what I
need to by simply attending?
Many
companies' first reaction to difficult times is to cut expenses and many
times marketing is the first to go. Cutting your marketing budget might be
the worst thing you can do and your revenue might fall even further if you
are not investing in your marketing strategies on a consistent basis.
If
you reduced your marketing budget by $25,000 the effect would be:
-
$25,000 increase to your bottom line
-
$75,000 decrease in sales (because marketing has calculated a 3x return on investment)
-
$37,500
increase (due to cost of sales decrease – 50% cost of sales on the $75,00 of sales)
-
$12,500 loss - Net effect
In this scenario, what seems to make sense – cutting $25,000 of spending
(expecting for a $25,000 gain) – would actually create a $12,500 loss.
|
|
