How to Develop a Marketing Strategy, Budget and Baseline to Grow Your Business

GainTap is a Chicago based digital marketing company. We help small businesses implement profitable websites and online marketing programs. Contact us to learn how we can help your company.

Here’s what a marketing consultant should do in the first month to get your company on the right track.

My name is Graham Onak, owner of GainTap and online marketing consultant. I’m often asked about what I’ll do in the first month at a company. The reality is before I’m even hired a good deal of work is done to understand the unique state of the client’s business during the proposal phase.

Identification of a baseline to build on.

If someone is interested in hiring me, they need help focusing their marketing efforts. Most companies I speak with don’t have dedicated marketing hires in-house. I’m usually coming in to assist a position that has been jointly held by the CEO / founder, a sales director and maybe a marketing assistant. Everyone is doing a little bit of something once in awhile. But there’s no clear direction or accountability for the company to market itself cohesively.

Growing companies can be disorganized so information needs to be re-evaluated.

This is common among growing companies. They don’t update processes or allocate resources because they’re too busy fulfilling work. If there’s an internal marketing person at the company this person is usually too close to the work and can’t see the big picture. Everything is tactical instead of strategic. This often means there’s a lot of data floating around but no clear action being taken on it. Again, very common among fast growing organizations that go from zero to six figure plus revenues in under a few years.

A baseline needs to be identified so growth can be measured.

Before you can create a strategy for getting somewhere, you have to understand where you are right now. Otherwise, you’ll have no idea if things are improving or getting worse. Luckily, analytics tools make that incredibly easy to measure. But it takes focus and experience to turn piles of data into useful information.

Websites are the core online place for most businesses and need to be analyzed.

When I first meet a prospective client, I’ll almost always ask for Google Analytics, or similar app, access before moving into the proposal stage. This helps me understand website and digital channel performance. Are they getting visits but no conversions? Do they have any visits at all? A proposal of work for a startup vs. an established company is wildly different, so understanding the baseline is critical towards managing client expectations and developing an effective marketing program.

Company product and service offerings need to be clarified.

Strong products and services are much easier to market and sell. Clarifying product and service offerings is essential to marketing them effectively.

What products and services are we focusing on?

For companies with a selection of products it’s often best to focus on the big money makers. Sometimes my clients already know what this is. Other times they need help in that area. I was approached by a company that had been in business for twelve years. They just launched a new product that had been on the market for three months and it was already making up 33% of their revenue. Their goal was shifting 100% to this product for their main revenue within three years. This information was helpful in developing a plan of action to make that happen.

Customers must be analyzed and value identified.

It’s important as an outsider to an organization that I fully understand the customers. This involves meeting with sales personnel as well as analyzing customer information for buying patterns. Understanding the value of a customer is critical to developing marketing budgets which will assist with developing a marketing strategy and plan.

Identifying customer segments

You absolutely have better customers. Pretending that all your customers are equal is an easy way to waste resources and fail to differentiate in a crowded market. Creating customer groups will allow marketing to use less resources and have higher rates of conversion by focusing their efforts on high value prospects.

What value does the company offer customers?

Why do your current customers buy from you? Why would they pay a premium for your products and services? How does working with your company make them feel? If you can’t answer those questions, I know who can. Your customers and your sales people are the primary groups who understand the value your company provides. Listening to them is essential to identifying the true value your company provides in the market.

Top questions to ask sales and marketing staff to better understand the value your company provides.

One of the first things I will do is interview both sales and marketing staff to understand the following:

  • Who are the customer groups and what do they look like?
  • What’s working and what’s not working?
  • How can marketing empower sales to sell better?
  • How can sales empower marketing to market better?
  • What needs to be done to align sales and marketing moving forward?
  • What are marketing’s strengths / weakness?
  • What resources do we have and where are they? (list of customers, sales collateral, advertising collateral, graphics, videos, etc)
  • What marketing campaigns are running or planned for the future?

Set company goals for marketing to achieve.

You know what’s a great way to make sure you exercise regularly? Sign up for a 5K. Just knowing you have an obligation to run will encourage you to go out and run more often. The same can be said for setting goals in marketing. Even if it feels like you have no idea what your goal should be, anything is better than nothing. Having a solid number to hit by a certain time will focus your efforts.

The company must have an overall goal or general direction to move in.

Most CEOs have a rough idea of what they want to accomplish. They may not know how to do it, but they have a number in their head. This can be anything from “selling 100 more tractors next year” to “increasing revenue by 30%.” This gives us something to build on.

Strategy and tactics can be created to help achieve the company goal.

Deeper analysis of the company’s performance will lead to a rough projection of metrics that need improvement.  If the company relies on their website for driving leads or sales, website metrics can shed light on conversion rates for forms and landing pages. Combined with product, service and customer value data – projections of visits, cost per visit, estimated advertising costs and estimated revenue can be developed. This projection will help guide a strategy, marketing plan and budget to reach the company goals.

The importance of setting a marketing budget even if it’s arbitrary.

Most CEO’s I speak with don’t want to talk about marketing budgets. They’ll say the budget is virtually unlimited as long as there’s a positive return on investment (ROI). I understand this concept. But for companies who have been doing absolutely no organized marketing, there has to be a starting point. Setting a marketing budget is important for the following reasons:

  • It sets accountability for spending money on growing the business
  • It sets accountability for measuring how marketing is affecting revenue
  • It provides clarity on what tactics are available for use in a marketing plan

Spending money on marketing is important for business growth.

8% of gross revenue is the suggested marketing budget spend for companies with under $5 million in revenue according to the Small Business Administration. You can generally think of it this way: 5% is maintaining current position, 10% is slight growth, 15%+ is growth focused. This varies by industry dependent on the margins of your products and services. If you’re a $3,000,0000 company, you could be seeing growth by spending $300,000 a year on marketing. That’s $25,000 a month covering wages and costs related to marketing, all of which can be written off by your accounting department. If that’s too much, spend at least 5% of your gross revenue on marketing to set a baseline.

Making sure marketing is delivering profitable ROI.

Marketing is a science. It involves a lot of testing. Sometimes these tests produce desired results. Sometimes they don’t. Measuring the effects of marketing tests is the only way a company can identify what works and what doesn’t. If something doesn’t work, change it. If it still doesn’t work, change it again. If nothing makes it work, stop spending money on it and try something else. And of course if something works, spend money on it.

A marketing budget will narrow your choice of marketing tactics.

Just like trying to find the right movie on Netflix, there are an overwhelming amount of tactics when it comes to marketing your business. Setting a marketing budget will help remove options from the table and create focus.

Identifying a marketing strategy and developing a marketing plan.

A business doesn’t operate in a vacuum. Excellent marketing strategies are difficult for competitors to copy and factor in multiple forces in the market. It’s easy to confuse strategy with tactics. But to put it simply, the marketing strategy is the big picture of how marketing will achieve the company goal. The marketing plan is the step-by-step process for fulfilling the strategy.

Author: Graham Onak
When not running the day-to-day activities of GainTap, Graham writes about technical optimization for websites and online marketing programs.

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