Start the Year With Four Questions, Not a Budget

It’s the middle of February. By now most business owners I talk to in Michiana have a marketing budget for the year, or at least a number in their head. Usually it’s last year’s number, plus or minus a little, spread across the same places it went last year.

I get why. It’s quick, and nobody has to argue about it. But a budget is an answer. Before you settle on the answer, it’s worth making sure you asked the right questions.

Why the number comes too early

When the budget comes first, the conversation turns into a shopping trip. How much for radio? How much for Facebook? Should we try that new thing a friend mentioned at the chamber lunch? Every channel gets judged on its own, and nobody steps back to ask whether the pieces work together.

The result is a plan that looks busy on paper and feels random in practice. Some things work, some don’t, and it’s hard to tell which is which. So next February, the same number gets spread across the same places again.

The four questions

Before you decide where a single dollar goes, sit down with whoever helps you run the business and answer these:

1. What are we trying to accomplish this year? Not “more sales.” Something specific. More repeat customers, a new location that needs to get known, a service line that should be twice as busy, a slow stretch of the calendar you want to fill.
2. What are we doing now? List every piece of marketing you’re running, paying for or maintaining. The website, the ads, the social pages, the sponsorships, the email list, the yard signs, the directory listing you forgot you were paying for. Most people are surprised how long the list is.
3. Where is it breaking? Follow the path a customer takes and look for the spots where people fall off. Calls that go to voicemail. A website that doesn’t mention the thing your ad talks about. Quotes that never get a follow-up.
4. What should happen next? Given the goal and where things break, what are the one or two moves that would make the biggest difference?

What the answers usually show

Here’s the pattern I see most often. The answer to question three is not “we need more advertising.” It’s something in between the advertising and the sale. The ads are doing their job, bringing people to the door, and something at the door is letting them go.

When that’s true, spending more on ads just sends more people to the same leak. Fixing the leak first makes every ad dollar you already spend work harder.

Sometimes the answer really is that not enough people know who you are yet. That’s fine too. Then the plan leans toward getting known, and you’ll know exactly why you’re spending the money.

Then set the budget

Once you have the answers, the budget gets much easier. You’re no longer splitting a number across channels because that’s what you did last year. You’re funding a plan.

It also becomes easier to defend. When a partner or a banker asks why you’re spending on something, you can point to the goal it serves and the break it fixes. And when the year is over, you’ll have something to measure against besides a feeling.

A couple of practical notes. Give yourself an hour, not ten minutes. Don’t do it alone, either. The person who answers your phone often knows more about where customers get lost than anyone else in the building. And write the answers down, so you can pull them out in June and see whether the plan is doing what you meant it to do.

If you want a head start on the third question, the Marketing Checkup takes a few minutes and points at where to look first.