As firms divvy up budgets for next year, I thought it a good time to share a framework that professional services firms and practices can use to evaluate and prioritize tactical marketing programs before the money starts flying around their firms.
Tactical Marketing Budget vs. Strategic Marketing Budget in Professional Services
First, it is important to delineate Tactical marketing spend with Strategic marketing spend. Tactical spend encompasses the specific program tactics (events, ads, email, tradeshow) and marketing channels at your disposal. Strategic marketing investments are allocations to broader, strategic revenue-driving objectives (i.e. generating demand, generating leads, supporting sales or developing new products and services). And, yes, they are different.
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Most Professional Services Firms Focus on Tactical Marketing Budgets First
Firms often ask “What is last year’s trade show going to cost us this year?” “What will the client event cost if we move it to a nicer venue?” “Industry benchmarking reports say that other firms are increasing ‘content marketing’ or videography budgets by XX %. Shouldn’t we do so as well?” High performing firms don’t start with Tactical spending and questions like this.
Instead, top firms begin by answering the correct strategic questions and allocating Strategic marketing investments first. Why? You cannot have intelligent Tactical spending without clearly delineating marketing’s desired strategic impact. Let me give you an example.
I was approached by a managing partner of a research firm to discuss rebranding his firm in the upcoming year. The firm’s business had been slowing the past 2 years and the leadership had allocated budget for a brand “refresh.” (If I had a dollar for every time I…) When I asked why the team thought the money should be invested in a rebrand, the firm leader responded that there were younger buyers who were unaware of the firm and its services. The team thought an updated, “cooler” brand would attract these new buyers. I met with the team and quickly discerned that the firm’s brand was not the problem. The issue was that the firm’s traditional market had shifted and the firm’s qualitative approach to research had been supplanted by newer, faster, cheaper, and more reliable quantitative approaches. Investing in a “rebrand” would have wasted precious time and resources that would never have achieved the desired goal.
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The goal was growth. The strategic objective and overall Strategic investment to be made was in Demand Generation. The solution was to build the brand’s “relevance” in the new space. Relevance is achieved by investing in an intellectual capital agenda that offers both a unique perspective on an issue and its solution. That means strategically investing in an IC agenda—not wasting money building brand “awareness” or “coolness.” Allocating the Tactical spend into programs that increased the firm’s relevance was straightforward after identifying the desired buyer, markets, ideal client profile, and the starting point. (Note: You cannot generate leads without relevance, so setting Lead Generation as the primary strategic objective would misallocate resources as well.)
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How Professional Services Can Allocate Marketing Budgets
One of the many great benefits that have accompanied the complexity, intensity, and speed of modern marketing is the strategic marketer’s ability to measure virtually everything she does. Regardless of the channel, each activity and its contribution to business goals can be measured. In the exhibit below, I breakdown Tactical program spend into four categories based on a program’s Cost and its Impact (i.e. its demonstrated/measured results in achieving its Strategic objective).
The 4 Professional Services Marketing Program Budget Categories:
1. Prodigals: High cost, low impact programs are the first to be eliminated or refined. Eliminating or modifying them frees up big marketing budget dollars to allocate elsewhere immediately.
2. Distractions: Low cost, low impact programs that may not cost much money. Like gnats flying in the face of an infielder, these programs distract focus from the game. They pop up when a firm lacks focus and is looking for a quick score. Eliminate them now. Avoid them in the future.
3. Prima Donnas: High cost; high returns. These programs work in achieving their objectives, but they consume a significant and disproportionate amount of your budget. Look for cost efficiencies, cost-sharing or synergies with other programs that make the program more productive without jeopardizing its impact.
4. Gems: Low cost, high return. These are a firm’s and a strategic marketer’s dream programs. They are client-focused, can be difficult to initially advance because they will represent new thinking and approaches, but the best marketers live to create them. Leverage the learning from them, where possible, across the firm and don’t become complacent with their success. A competitive market will copy you quickly.
Once you have delineated the strategic objective, Marketing’s activities (i.e. Tactical spend) can then be quickly and easily determined. Once a Strategic budget is allocated, legacy Tactical spend can be evaluated for future/ongoing investment or reallocation.
By setting goals, measuring every marketing program, and regularly mapping each on a matrix like the one above ensures that your Tactical spend is aligned and delivering on your firm’s Strategic investments.