30 May 2007
The ABC’s of Marketing: The Allocation of Budget Cascade
Your Business Blogger recently had a conversation with a reporter from Forbes.com. She posed the following questions for start-ups,
[What are some] marketing strategies that are worth the money.
If a cash-strapped small business owner were to pick one big marketing expense, what would it be and how much should they spend?
We’re not necessarily limiting this to one kind of marketing (online, direct mail, etc.), so feel free to cast a wide net with your thoughts.
Following are some notes as we talked.
Marketing has the well known “Five P’s”
Let us will make the dangerous assumption that these first 3 P’s are perfect in this scenario.
Product
Price
Packaging
And let’s lay money down on Promotion and Place:
Promotion
So what get’s the best return on the small business budget for the best reach, frequency and awareness?
Find a Friend
Get a reputation
Rent them, if you must
Marketing is what a sales guy does when he’s got no one to talk to.
Marketing today should be a seamless continuum from Bits to Atoms .
Here is the Allocation of Budget Cascade where ever the small business owner is found — bricks or clicks. Let’s start with $15k and go down the funnel:
Bits
1) Website $1,000
Interactive — Your on line presence will be more than an on line brochure.
Information — Free content on line. Your site will be a resource.
Blog — immediate interaction with prospects and customers.
2) Search Engines $2,000
Google, Yahoo, are the new Yellow Pages. Buy ad space and clicks to attempt to drive prospects to your site or phone number.
Atoms
3) Professional organizations $3,000.
Find an umbrella and get under it.The Small Business Owner as Rainmaker — The Boss is the embodiment of sales and marketing. The owner generates the leads and closes the sale.
4) Professional education $4,000.
Not yours, your prospects. The smart small business owner develops a service parallel to the product.
In the late 80’s Your Business Blogger was part of a medical device start-up. With no money.
We were launching new products, with new technology, teaching new surgical techniques, new medicine.
Conventional wisdom dictated hiring a half-dozen advanced-skill nurses to teach around the country. Our Board of Directors said no budget. This was a problem. Our product required extensive inservice training.
With a product that was 100 times the cost of its nearest competitive substitute.
So what’s a thinly capitalized company in trouble to do?
Throw a party.
Events have four components to be SAFE: Speaker, Attendees, Food, Entertainment.
Where we sold,
Features, what the product is
Advantages, what the product does
Benefits, So What? The product has a superlative: faster, better, cheaper
5) Professionals $5,000
Install a odd number of advisors and treat them like a board of directors — with out the liability nonsense and the need to cover them under Directors and Officers insurance. Use your board of advisors for contacts, consulting and access to capital.
Businesses, small and large should use small, easy to cancel marketing programs as pilots. Test. Then feed or kill and launch another and measure the return on investment.
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