You could be getting more out of your marketing budget. This article will show you how.
If your marketing budget is big, use these tools and tips to maximize your efforts. If your budget is small, let’s make that budget stretch. Either way, you can make your budget work harder and do more.
If you take these tips to heart, one of two things will happen:
- You’ll spend less. The money you save will go straight to the bottom line, increasing profits and the value of your company.
- You’ll spend the same amount of money but reach more people.
Either way, you’ll improve your ROI (return on investment).
Ready to make those dollars work harder? Here’s how to make the most of your marketing budget.
1. Negotiate advertising spends
It’s crazy to me that many marketers don’t negotiate their advertising contracts.
Did you know – most of the rates you receive from salespeople are high because they expect you to negotiate. Do not settle for the first price you are offered. Over the years, I have saved millions of dollars (at least 30%) by negotiating everything.
What can be negotiated: If you are dealing directly with a salesperson, there’s likely a lot of wiggle room in the pricing. Examples include billboards, radio ads, and posts from social influencers.
What can’t be negotiated: If you are working with a platform instead of a person (like Facebook advertising) it’s unlikely you will be able to negotiate.
What can be but shouldn’t be negotiated: Although you can negotiate with agencies, freelancers, and creatives, I typically don’t. Agencies are likely to drop their price to secure your business, but they will also drop their commitment level to your project. You’ll end up with a rookie project manager instead of their best. They will limit the hours they spend on your account.
By the way, there’s a lot to know when working with agencies. If you’re considering hiring an agency, read my guide to working with marketing agencies.
How to negotiate: Tips to help you get the best price.
- The more you spend, the more purchasing power you have. The more purchasing power you have, the more leverage you have to negotiate.
- Always compare pricing. The companies sending you pricing hate to lose to their competitors. Let them know that you are considering other options, including their arch nemesis.
- You can get a greatly reduced rate if you are willing to commit to a longer time period, such as 12, 18, or 24 months.
- If the price is firm, go for added value (meaning extra coverage) instead of a price reduction. If they won’t take less, try to get more for the same price.
- Make sure you have a reasonable budget to work with. You shouldn’t attempt billboard advertising with a budget of $300 per month.
- Start by making an offer that feels crazy – anchoring low is a great way to start the negotiation. My first offer is typically 50-60% off the rack rate.
- Just because you are getting a deal doesn’t make it a good investment. Getting something you don’t need for 50% off is still a waste of money.
2. Talk to customers (in real life)
Did you play video games in the 90’s? If so, do you remember how you could enter a secret code on your controller that would give you an advantage in the game? These secret codes were called ‘cheat codes’ because they made the game easier.
Talking to your customers is like having a marketing cheat code. It makes your ideas better. It makes your messaging more compelling. It makes your advertising more effective. It ensures that you make the most of your marketing budget. It’s like getting to take a swing at the piñata without a blindfold and without being dizzied.
Regrettably, this is not something I encouraged enough during my first 5 years leading the marketing team at The Escape Game. But in 2022, that changed. Our team split up and traveled to 7 different cities to interview our customers. The experience made an immediate impact on our strategy. It added deep insight to our decision making and made our discussions far more fruitful. It also highlighted the fact that our gut and intuition are dead wrong much of time.
According to a survey by Forrester, 37% of marketers feel they are wasting marketing spend as a result of bad data. Want to avoid that? Talk to your customers. Customer conversations are the best data you could possibly have as you decide how to deploy your marketing budget.
3. Nail your messaging
After speaking to your customers, you’re ready to refine your messaging. Talking to your customers will teach you how to speak their language, how to talk about their problems, and how to frame yourself as the solution.
If your messaging is clear, consistent, and compelling, people will tune in and your conversion rates will go up.
If you are looking for help refining your messaging, you’ve got to check out StoryBrand. They have books, courses, and videos that will help you craft clear and compelling messaging that connects with your customers.
4. Experiment the right way
Once you’ve spoken to customers and refined your messaging, now you are ready to experiment. Fine tune your strategy by experimenting with different marketing channels and advertisements. Here’s how to run advertising experiments the right way:
Start small
There’s no reason to risk most of your marketing budget on an untested idea. Start by testing with a small budget (this is obviously subjective) and crank up the spend when you prove it’s a viable idea. According to Rakuten Marketing, 30% of marketers think they waste 21-40% of their budget on the wrong channels. By exploring new channels with a small budget, you’ll waste far less.
But spend enough to make the idea work
If you’re going to test something, make sure you have the money to test it properly.
In 2017, Cards Against Humanity ran a Super Bowl ad which cost them over $5 million dollars. Although the concept for the ad was fun (see below), it was a total failure that pushed the company to near extinction (read the full story here).
The original concept included the song “Sympathy for the Devil” by the Rolling Stones playing in the background. But the license for that song was going to cost $1.5 million dollars. So the song was cut.
As a result, the final ad was flat and uninteresting.
So it begs the question – why spend over $5 million for 30 seconds of air-time if you are unwilling to spend the money necessary to make your ad good?
Don’t experiment with a new channel unless you have the budget to do it right.
Be clear about what a win for the experiment will look like
If you can’t articulate what a win looks like, then your results will be inconclusive. Money wasted.Inconclusive is far worse than failing fast and moving on the next experiment. Clearly outline the conditions that need to be met to deem the experiment a success.
Define the length of the experiment before starting
At what point will you evaluate the results and make a decision on next steps? Always decide this before you start an experiment.
5. Teach your team to save and teach your team to execute
If you’re the marketing leader, you are responsible for your team’s strategy, execution, and expenditures. Here are 2 ways to maximize your spend:
Teach your team the principles in this article
Don’t let yourself be the only budget-conscious person on the team. Train your team to negotiate. Expect them to talk to customers. Teach them to run good experiments.
Teach your team to execute
Poor execution is the biggest budget waster there is. A great idea executed poorly will fail. A key role of a marketing leader is to teach effective execution. If you can teach your team to execute, then you’ve taught them to win. If you need help in this area, read my Marketing Execution Plan.
Go forth and save!
Now you’ve got a choice to make. Should you invest your savings into more advertising so you can reach more people OR bank the savings and increase profit?
If you have questions, comments, or ideas, email me at teddy@teddycheek.com. I’d love to hear from you.
