For the month of November we have been discussing the entire
Forecasting process that makes up the budgets for the following
year. Today, we are going to discuss forecasting your budgets for
advertising.
Your advertising forecast tells you how you plan to attract
more scrapbooking customers. It is not uncommon for a
business to have a five-year business plan but to only have a
next 60-day marketing plan. This is probably because banks don't
ever ask to see a marketing plan. But a marketing plan is
required if you want your business to become a household brand
name.
How to Create the Marketing Plan
The creation of a marketing plan requires two pieces of
information.
1. The annual ad budget broken out by month to account for
seasonal consumer shopping patterns.
Ask questions like:
a. How much can our business afford to invest in
advertising, even if it doesn't immediately seem to be working?
b. When are our slowest times?
c. When do I need to move inventory?
2. Knowledge of the strength of your brand.
Ask Questions Like:
a. Why would anyone choose to do business with us?
b. What desire or need do we fill?
c. What is our most important message to the customer?
With this information in hand, the remaining question is, "What
is the best use of our advertising dollars?"
Tragically, most advertisers think, "I'll just experiment until
something starts working, and then I'll just keep doing that
until it quits working." This is why most business owners think,
"Advertising is a rip-off."
There are many variables to advertising
– from “Do I have
the right product at the right time for the right price? to “Is
my branding message getting through to the right demographic
within the marketplace?” In all truth, the type of ad that
pays off immediately has diminishing effects the longer you keep
running it. And the ads that will make customers think of you
immediately when they need what you sell (true branding) usually
doesn't begin showing any encouraging results for at least 13
weeks. These branding ads will provide you a greater
return the longer you keep running them. But most advertisers
will cancel these ads after only eight or nine weeks.
The thing to remember when
developing your marketing plan is that you're not looking for
what works. Every type of advertising "works" to one degree or
another. What you're looking for is the best long-term use of
your ad budget. Then you have to develop an advertising message
within your marketing plan.
How to Spend the Dollars
Your goal is to reach the largest number of people with the
greatest amount of repetition that your budget will allow. In
advertising, we call this reach and frequency. The questions
you're trying to answer are these:
1. What do we need to say to the customer and how often do we need
to say it?
2. And which media will give us the most efficient long-term access
to the same customers over and over?
Planning your marketing and sticking to the marketing plan is
the secret to making your business plan work. Of course, not
every ad you run can be a branding ad; you will need to run ads
on specific product of a specific time frame. As a
scrapbooking retailer you need to know that only 4% of all women
in North America between the ages of 16 and 65 have scrapbooked.
80% of those that see your ads are already your clients, so
you need creative ads that really pop to encourage those who see
your ad to into your scrapbooking store.
Retailers in the scrapbooking industry must spend about 5%
of their sales on advertising. Not enough money is being
spent to create new scrapbookers. As a result, it is likely that
you have noticed that business is getting tighter and tighter
with each passing month. This is because we have not created
enough new scrapbookers to help the industry pick up the pace.
Forecasting your adverting budgets and formatting your market
plan for 2006 must be concluded by the end of this month to be
ready in 2006. And that is what being business SMART is all
about. |
