How much should you spend on marketing and communications for your business?

When things are going well

If we want to keep our offices and warehouses, we have to keep paying the rent. There might be some days that you don’t use your workplace, but we know that we still have to pay the bills, otherwise we’ll lose the access to our business tools. Imagine having to find a new premise to work from every Monday morning!

‘Marketing and communications’ is a budget line that attracts more discussion than most others. When things are going well, it’s easy to consider this function unnecessary, but when things suddenly turn for the worst, it is something that is called into action – and immediate results are desired.

To keep a constant flow of business, manage your reputation through the good times and the challenging, maintain staff morale, fill the ‘pipeline’ of enquiries down the track and build your brand awareness, it is vital that you have a constant marketing and communications stream flowing in and out of your company.

So, how much is this going to cost me?

I get asked this a lot. Depending on your specific industry and products there are a number of different formulas that people use. For example, you’ll often hear that the spend on marketing should be at least 5-10% of your gross turnover. However, if you yield big profits for your product, you may not need to spend that much.

In actual fact, the answer is different for everyone. Still there are some good basic principles that can help you determine your marketing and communications budget.

Where are we?

This is the place to start. Where are you right now? Have you been in business for a while or just starting up? Have you just moved premise, merged, bought a new line, expanded staff, retrenched or want to sell? Where you are now is a huge consideration for what your marketing and communications objectives will be and what strategies you’ll need to help you on your way.

Every business is unique. I like to personify businesses as it gives the group an opportunity to build a consensus. Here is a quick guide – and something to discuss at a staff meeting:

If your company was a person:

1. What gender would it be?
2. How old would it be?
3. What would it find important in life?
4. What car would it drive?
5. What sport would it follow?
6. What personality traits would it have?
7. Where would it go on holiday?
8. What would it drink?

Although these questions can be used to determine your brand identity, they are a good start to ascertaining what the needs of your company are.

For example, if you are a young, fresh-faced 20 year-old that drives a Holden ute and likes rum and coke, you are going to have very different marketing needs than a 50 year-old who drives a Jaguar and only drinks champagne. What you need to communicate, to whom, in what format and how regularly influences all decisions are from here.

To the summit!

Where are you going? Sometimes this is the hardest question of all. What do you want the business to be like in 2 years, 5 years and 10 years?

Being really clear on this is not always easy – but it is critical. The function of marketing and communications is to serve the objectives of the business. We need to know what your goals are in order to help you get there.

Where you are now and where you want to go are two major questions of a strategic communications planning session. A communications plan will draw from you your mission, values, brand attributes, key messages, communication objectives, strategies and even budget.

Having a communications plan is an upfront cost; however, it saves you an enormous amount of money in the long run.

Here’s why.

1. Your message needs to be consistent across all platforms, from website to brochures, because you are creating the purpose of your business in your customer’s eyes. When the message is consistent there is less confusion and more impact.
2. Having your brand attributes and key messages sorted out means your printed material will stay relevant for longer.
3. When promotional and media opportunities arise you already have messages and concepts on hand.
4. When your staff members know your business direction and messages, they can spread a strong and consistent message to all that they meet – this not only leverages your reach, it builds credibility.
5. Using external marketing expertise to construct your communications plan gives you access to experienced senior people and advice, without having to pay for a full wage.

Tool Box

You wouldn’t allow a carpenter to do a job for you if they didn’t have the right tools. Neither should your marketing and communications team. Having a strong base of tools is fundamental for success, will help you build marketing capability into your organisation and ensures your efforts remain relevant.

Here are some basics:

1. A good domain name that is easy to remember and spell – and has matching email addresses! There is nothing worse than a company that has a domain name that doesn’t match its email addresses.
2. A good website that is built on a Content Management System (CMS); this means you can update the text and images on your site.
3. A strong, clear and attractive logo. You also need to update your logo every 4-5 years. If the name of your business doesn’t relate to your product or service, then you need to invest in a concise descriptive tagline. For example, if your shop fitting business was called Alligator, you’ll need to add a tagline such as: Shop Fitting Experts.
4. Really good artwork. You need to have your logos created in jpg and eps format, black and white versions and stacked and ‘in-line’ versions. Having this all done at once will save you time in the end. I also recommend that you get different sizes in each (small through to extra large) so that you easily adapt the artwork. Changing logos in programs like Paint  can destroy a file. Also, the quality of files diminishes over time. So save your original files a couple of times and then only use one set of them – they will last longer.
5. An html email system / broadcast tool with a few template. This will allow you to send out a newsletter or Electronic Direct Mail (EDM) which refers to a one message e-newsletter replacing hardcopy fliers. However, be sure to get it created properly to get maximum benefits.
6. A 50, 100, 150, 250 word description of your company.
7. A full suite of designed collateral – business cards, letterhead, fax, signage, uniforms, invoices etc. Don’t forget a style guide – this is a document that states how the brand is to be represented by all staff at all touch points.
8. Descriptions and images of your products. Having these two things will enable you to create factsheets, text for your website, brochures to download off the website, content for your newsletters etc.

Tricks of the trade to save money

What is the most used communication tool in your office? Your email.

Making a creative and eye catching email signature tag is making the most of some valuable real estate.

Engage, engage, engage

Communications management is all about engage in relationships with your target market. Gather your team around your meeting table and ask – how could we best engage with our clients right now? Your staff will know.

Whether you are calling, emailing, sending email newsletters, having events, sending mail or commissioning research about client sentiment, make sure it encourages two-way communication – it helps your clients feel heard, and it helps you respond to their concerns.

Be generous with your time and knowledge

Be the people that answer questions and refer to other businesses when queries you can’t help with come your way. This will help to develop your profile and leadership status. It only takes a small amount of time – but you will soon be known as the go-to person.

In the same vein, get involved in your association, go to meetings and events and have a say. You will quickly be able to raise the profile of you business and yourself. But the most valuable part of being involved is having access to information about what is happening in your industry.

Safety is not an option

We have a poster up in our office that reads, ‘playing it safe is the most dangerous thing to do’. Richard Branson didn’t play it safe, Nelson Mandela didn’t play it safe – in fact all the famous people you know took a risk to get to where they are. You don’t have to hot-air balloon around the world, but you can be expressive and creative with your communication – try something that hasn’t been seen before in your industry. Being creative doesn’t cost more – it just makes what you are doing more valuable.

Zadro is an expert in designing and implementing marketing and communications tailored to the unique requirements of your business. Find out more: www.zadroagency.com.au