Are you responsible for developing your marketing budget for 2010?  Have you spent countless hours trying to determine what to include or what to cut with the limited budget you have?  Are you frustrated by the numbers you have been given, due to the peak and valley census you experienced in 2009? 

There was nothing more frustrating for me as a leader responsible for the marketing budget, then when I was handed an estimated amount of what my budget was going to be for the next year.  At which point I had to guesstimate what the budget would really be, and then try to maximize the most effective marketing techniques to yield results. 

Marketing leaders are under pressure more than ever today to get results for their marketing money.  Marketing budgets are easy to cut in an economy as punishing as this one, so it’s never been more essential to develop a marketing budget based on return on investment (ROI). 

I have found that developing a budget based upon proven ROI led to attaining the extra dollars I needed to really implement the marketing strategies that I knew would be most effective.  Here are some proven strategies to attain the budget you need:

Evaluate your past 12 months’ marketing strategies.  Honestly assess which strategies were effective and which ones were not.  I find this is a challenge for many clients because they may have emotional ties to certain events (such as a fair booth), or they’ve known the newspaper representative forever and feel they “have” to advertise.  Budgets are not a time for emotions.  They require an identification of which strategies are effective and which ones aren’t.

Break your budget into categories.  Often the biggest challenge I run into with clients is that they have no idea how much they have spent for what, and if it was effective.  By breaking down the budget into different categories, it will force you to make proactive planning decisions on which strategies to implement, and eliminates spontaneous marketing decisions throughout the year. Categories include:

ü  Advertising (newspaper, radio, tv, cable, internet, goodwill advertising, yellow page, publications); I recommend a separate subcategory for each of these. You will be amazed at how dollars can add up in this category, that are not well spent.

ü  Promotional (pens, note pads, apparel, give-aways, welcome and discharge gifts, funeral gifts); Have a specific purpose for each investment, otherwise you are just throwing away dollars.

ü  Events (include all expenses related to events); Every event should have a defined outcome.

ü  Collateral material (brochures, educational publications, etc.)

 

ü  Direct mail campaigns: Direct mail campaigns should have a “call to action” and a follow up process to be effective.

ü  Website (maintenance, upgrades)

ü  Networking: Memberships to networking organizations such as Rotary or Kiwanis.  Don’t forget to factor in any meal or other obligatory fees associated with the membership.

ü  Sales calls:  Estimated cost for travel, occasional lunches, educational workshops, etc. associated with referral sources.

ü  Research and development: If your department is responsible for marketing feasibility studies, be sure to include these large ticket services.

ü  Customer Surveys: Determine if annual customer satisfaction surveys are included in your budget, and be sure to factor in the cost.  This may also include mystery shopping, if that is a service your organization engages in.

ü  Miscellaneous: Every organization has different accounting procedures on how items such as mileage, postage, training, etc. should be included in your budget.  Be sure you know these procedures so that you don’t find out later that the postage (which you didn’t allocate money to) came out of your budget, and now you have to eliminate something essential in your marketing plan.

Budget Amounts.  After you have prioritized your most effective strategies, allocate dollars to each category.  This should be easy if you worked off of this format during the year.  If you did not, then guesstimate each category.  On average, include a 3-4% increase in your amount to offset the cost of living increase that vendors will use to increase their fees for the next year.

Measurement.  Prepare to measure your ROI and track your budget by establishing either an Excel spreadsheet or manual tracking.  What is most important is to measure!  Determine how you will collect the effectiveness of each strategy you will use.  For example, during an inquiry interview, be sure the staff is trained to ask the question, “How did you hear about us?”, “Why did you select us?”, “Have you heard our radio ad?”, etc.  Do your forms include areas to collect this information?  Where does this data get stored for analysis?  An essential tool today for every organization is a CRM (Customer Relationship Management) system to make this a seamless process.

My success in attaining the marketing dollars I needed resulted in having a budget that was linked to my marketing plan, with both being measured in terms of expenses as well as ROI.  A well-planned and executed strategy results in achieving the goals established by the organization.  The key is to be open and honest about what strategies are working and which ones aren’t, having a marketing plan associated with a budget (and sticking to it), and communicating to management on your ROI throughout the year at every opportunity you get.  Remember, leaders are often only looking at the bottom line, and lose site of what their investment is really giving them in return.

Patty Cisco is President and Founder of Cisco & Co, and helps senior health care leaders achieve their goals by proven creative marketing, sales and customer service strategies.  Patty invites you to connect with her on Linked In at www.linkedin.com/in/ciscoco