With the new financial year round the corner, it is planning time once more. Here are a few guidelines and tips on how you can get the maximum bang for the buck from your marketing spend:

As a marketer, you are faced with the following questions at this time:

• What kind of budget do I set aside for marketing to make a meaningful contribution to the business?
• What is my peer group doing?
• What activities do I need to plan for?
• What approach do I need to adopt to arrive at the budget?

And many more.

Making a Plan

The best way to start the budgeting process is to start with a marketing plan. List down a set of initiatives and their frequencies for the next year based on the needs of your business:

• Are you planning to introduce new offerings, and if so, what kind of activities do you need to plan for the launch?
• Is there a plan to enter new markets?
• Do you need re-examine your company positioning?
• Is it your company's goal to focus more on customer retention and mining?
• Is inorganic growth a part of the company strategy within the next year?

Getting answers to such questions will give you many pointers towards the contours of your marketing plan and programs.

For example, if you are planning a new product launch, think through all the marketing activities that would help the product get that head start in the market- this would include pre-launch activities such as PR and analyst briefs, demos to select customers etc. If you have industry events around the time of the planned launch, then you could use the event to launch your product. So, the next step is to think through your event planning in some detail. What are the ways in which you can utilize the event? How can you link the pre-product marketing activities with your event participation? Can you start communicating with likely event attendees about your product to create the right level of interest in them?

For the event planning, think about the messaging, booth branding, marketing material that you may need to create and the PR you would want. Each of these elements may come with a lead time, resource requirement and a budget.

At the end of this exercise, you would have a detailed product launch plan leading to an estimate of the budget needed for a successful launch.

Learning from last year

Next, also look at your current set of activities in marketing and evaluate their effectiveness. That would tell you which activities you will sharpen focus on and those that you may want to slow down on, or eliminate.

Assuming that your current marketing activities include event participation, online marketing and lead generation, examine the relevance and outcomes of each of these. Were the events you participated in useful? If not, was it because of lack of preparation, or because of the wrong choice of events. Similarly, if online marketing is a priority area, then do you think your website is serving its purpose well? Is it content rich, and well optimized for search engines? Do you have a newsletter which can complement your online marketing and/or lead generation activities? If no, what frequency makes sense?

Now, put together a marketing calendar for the next year, based on likely frequency and timing of the planned activities and programs.

Bottom line

For estimating spends on various programs, you could rely on your current experience, get quotes from service providers as well as talk to peer group companies.

This process should give you a very good indication of the marketing program outlay you desire.

In addition, you would need to add the people count and costs to this budget. While doing this, think about what activities you would like to carry out in-house and those that you may want to get done through an external partner.

Once you have your first-cut budget, it is useful to validate the overall numbers, and here is where industry benchmarks come in handy. According to Prayag's annual marketing survey, emerging technology companies spend anywhere from 2-15% of revenues on marketing. In our view, a minimum of 5% is advisable, and if you have discretionary programs such as a new product launch, then, it is good to set aside money specifically for this.

RoI - It is all about the metrics

Last, it is important to demonstrate the returns to business through the planned marketing initiatives while presenting the budget. One of the most often quoted reasons for lack of sufficient investments in marketing is the management's inability to determine returns, and hence it is essential to spend time on this aspect. A related point is to put down metrics that will help measure the success of the various programs. For example, some useful metrics for online marketing programs would be, apart from number of leads generated through the website and your email campaigns, number of downloads from the website, average time spent on the website by a visitor, regional break up of visitors and whether this maps with your target markets, number of prospective employees enquiries / applications got through the website, number of subscriptions to newsletter, leads through online ads etc.

The budgetary process is often considered a chore and a task to be done with. In contrast, if companies use this time to think through their plans for the next year and then arrive at the budget, it will make the exercise more meaningful and also enhance chances of the budget being granted.