The marketing budget - "We need marketing but it costs so much"

By John R. Graham

"We would like to talk with you about our marketing," said the prospective client. "Even though we want to grow, we have a limited budget. If that's a problem, we'll understand."

The irony is that every marketing budget is limited, whether it's a start up company or General Motors. No company is free from fiscal restraints.

"Marketing on a shoestring" is a popular topic because this is a message companies like to hear. When the list of what can be done on the cheap is rolled out, interest wanes because what's required is an intense, consistent effort to make it all happen. And that turns out to be anything but cheap!

The issue is priorities, not just the size of the marketing budget. The essential task then is implementing marketing strategies that maximize every available dollar.

Yes, there are times when it's best to wait until adequate resources are available before embarking on a marketing program. If the budget will not sustain a proper program, any dollars spent will be wasted.

At the same time, there are strategies that apply to marketing budgets of all sizes. It helps to be totally candid so the issues are as clear as possible. Here they are:

1. Avoid stupidity

There's more than enough stupidity when it comes to marketing. When asked why they were using cable advertising, the president of the company said, "We thought we should do something." Believe it or not, that's an all too common reason for doing direct mail, any form of advertising, holding a golf tournament or whatever. Nevertheless, it fails to mask a painfully high level of marketing ignorance.

Here's the point: no marketing initiatives should take place that aren't grounded in fact. And that means market research.

Incredible as it may seem, far too many companies assume they know the profile of their best customers. And they then accept their assumptions as fact.

A large dry cleaning chain opened a new store in a high-density urban neighborhood. The results of an initial direct-mail campaign were less than expected. Other efforts were marginal at best. Finally, the marketing company mapped the customer base to locate where the traffic was coming from, developed a direct-mail piece with a compelling offer to drive consumers to the difficult-to-find store. Within six weeks after the second mailing, sales had doubled and were well within the company's projections. The sales momentum continued after the offer had expired and the season was coming to an end.

While it's difficult to understand, business owners and executives want to rely on their gut instincts rather than look for solid data on which to base their marketing decisions. Far too often, stupidity prevails.

2. Avoid spontaneity

While following a detailed marketing plan may seem obvious, practice proves otherwise. Most marketing is opportunistic.

Although there are times when deviating from a plan is appropriate in order to take advantage of an unusual opportunity, the exceptions are few and far between.

Schick's effectively doubled its share of the men's blade market with a modest advertising budget when it introduced its four-blade razor. Gillette, the category's 800-pound gorilla, was clearly caught off guard. There was a clear plan to Schick's roll out.

A marketing plan is simple; there's nothing complicated about it. Here's the question that drives every successful marketing activity: Who's going to do what to whom, when and why? It's the "why," of course, that is generally ignored. And it's the "why" that makes the difference.

The fundamental threat to effective marketing plans is a lack of will. Perhaps a lack of commitment is more accurate. Failure not only comes from poorly conceived concepts, but from companies' inability to remain committed to sustaining an agreed upon program over time.

3. Avoid myopia

Without question, the most difficult concept to get across is that marketing success depends on its cumulative effect. The goal of any individual marketing initiative should be to add to a company's reservoir of customer goodwill. In other words, the objective is to strengthen the brand. In more poignant terms, marketing should bulletproof a company or product against competitor attack.

Here's the essential question: "How does this newsletter, ad, direct mail campaign, press release, special event or trade show improve the brand?" If it doesn't, the money is wasted. If it does or can be changed to have a positive effect, the money spent has value.

The objective of a marketing budget is not to buy so many sales. Its purpose is more far reaching and fundamental: to assure a company of flow of business over time. To put it another way, opportunistic marketing expenditures almost always miss the real opportunities.

The issue is less the size of a marketing budget than it is the way the budget is used and how management views the marketing enterprise. Avoiding ignorance, opportunistic actions and shortsightedness can help turn dollars into brand-building value.

John R. Graham is president of Graham Communications, a marketing and sales consulting firm in Quincy, Mass., 02170 (617-328-0069;j_graham@grahamcomm.com. The company's Web site is www.grahamcomm.com.