Traditionally, marketing dollars are allocated by individual lines of business. More often than not, the largest lines of business command the biggest percent of the marketing budget. After all, they are the “cash cow.” But this way of thinking is outdated, short-term, and ineffective because it results in misaligned mindsets and tactics. The number one priority for marketing should be delivering qualified leads that drive a healthy, profitable, long-term growth cycle across the business. Your investments and activities should achieve this objective. Here is how to easily invest your marketing budget to increase its ROI.
4 Ways to Invest Your Marketing Budget
To effectively allocate your marketing budget you must understand where the investment is needed in order to prioritize profitable growth. This can be easily done by mapping your practice/line of business current performance in terms of your market segment’s need, your practice’s brand strength/relevance and viability of the growth opportunity you wish to pursue. I use a four-square model like the one below.
- The left vertical axis measures your market segment’s need. What is its most pressing issue? Is the issue a new one or a mature one? Is it an issue the buyers are aware that they have, or is it a pending one based on your analysis and insights about the future?
- The right vertical axis defines the growth opportunity for your firm or practice. Is the market pie sizable? Are there multiple competitors or none? Is there an opportunity for you to add value and command premium fees?
- The horizontal axis reflects your brand relevance. Does the market consider you an expert in addressing this issue? Are you invited to the table to propose on work? Do you have brand preference?
If you are in Quadrant 1:
- Your clients are unaware of the issue in their lives.
- You do NOT have a strong brand around the issue.
- The client need provides a growth opportunity for your firm.
Your focus should be on DEMAND GENERATION. Invest the majority of your marketing resources to build awareness of the issue, demonstrate your firm’s credibility to solve the issue and nurture leads for future engagement. Smart tactical investments are thought leadership, research studies, media relations, public speaking, social media and webinars.
If you are in Quadrant 2,
- Your clients are unaware of the issue in their lives.
- You have a strong brand around the issue.
- The client need provides a growth opportunity for your firm.
Your focus is LEAD GENERATION. Invest marketing in generating leads today with highly targeted lead generation activities that speak with authority, detail the issue’s urgency, have a strong call to action and provide scale, such as speaking engagements, direct mail and seminars. If you have not already made the investment, integrated CRM and marketing automation should be a priority and will provide major ROI lift in Quadrants 1 and 2.
If you are in Quadrant 3:
- Your clients are very aware of the issue in their lives.
- You have a strong brand around the issue.
- The client need provides a limited but profitable opportunity for your firm.
You focus is PERSONAL SELLING. Save your marketing budget. Call your client or prospect, demonstrate the business case and simply ask for the business.
If you are in Quadrant 4,
- The issue is very mature.
- There is a limited growth opportunity.
- You have limited or no noteworthy brand relevance.
Your focus is on REDEPLOYMENT of resources. It is time to make strategic choices to exit existing businesses that have run their courses or in which you have failed to achieve brand relevance. Then, reallocate time and resources to develop market-tested, viable new products and services. However, be prudent. Often professional services firms want to productize a single successful client engagement. This is always premature and gobbles up resources that are better spent elsewhere. READ: The Fallacy of Productization
Takeaway
A prudent marketing strategy goes hand-in-glove with the business strategy. However, firms often fail to translate one to the other. Recognize that if you are not building demand today, then you won’t have lead-generation opportunities in the future and business will suffer. If you are not calling clients on issues that you know they have, then you are missing opportunities for today. Finally, you, your practice and your firm risk commoditization if you are not investing in innovative new services.
Growth investment decisions can be difficult for professional service firms. They involve opportunity costs, cultural evolution (or revolution) and emotional upheaval when partners feel that their wealth is being “redistributed.” Strategic choices often do not get made and firms default to a “grow everything” approach. Like your relationships, marketing should be seen as a long-term investment. This investment creates the highest return when it builds brand relevance, pursues the highest growth opportunities and aligns with the client’s needs from beginning to end.
Be prudent.
