AAM Minute: Best Practices
By Jaimi Koechel, Henry+Horne
Planning the annual marketing budget can be daunting for marketers, but it is a necessary numbers task. It’s important to have a marketing budget to make sure you are staying on target with your investments. It can assist your marketing plan for the year and support measuring your return on investments (ROI).
Here are some best practices to keep in mind when planning your marketing budget:
Ongoing – The marketing budget is an ongoing thing. It’s not something you can finish and not look at again until the next fiscal year. I look at my marketing budget each month as I review the firm’s GL to pull out the actual investments and compare those numbers against my estimated budget to make sure we are staying on track. It also helps me see where we are with items that were not planned but hit my budget anyway. Think partner client sponsorships or donations.
Meet with Niche Leaders – At the end of the fiscal year, I set meetings with each niche leader to review the budget. What worked and what didn’t work? Were there line items that were not planned for and what happened with them? We also discuss the plan for the new fiscal year by setting new goals and action items to reach those goals. I will then put each niche marketing budget together that rolls into one firm-wide consolidated marketing budget.
Review and Plan – I review the prior fiscal year’s budget for the firm and determine what worked and what didn’t work. I will compare the budget to Hinge’s marketing budget benchmarking study to see how we compare to the high growth firms. Is there something that our firm should be doing and isn’t doing? Are there goals that could be set to be more in line with the high growth firms? I will use this comparison, what worked from last year and what new initiatives I want for the upcoming year to create the marketing budget for the new fiscal year.
Finalize the Budget – Once I have the firm consolidated budget put together, I will present it to my Co-Managing Partners. I will also take Hinge’s marketing budget benchmarking study, along with my notes, to show our budget in comparison to high growth firms. This typically gets me further buy-in to investing more money in areas the partners might not understand as a good ROI.
Repeat – Once I walk away with the approval from my Co-Managing Partners, it’s time to start all over again with a new year of reviewing the monthly GLs and comparing them to my budget.
Here are a few essentials to consider when planning your budget:
- What are your goals for the new fiscal year? What are you trying to accomplish for the firm? How are you going to reach those goals?
- Look at last year’s budget to see if any of the successful initiatives could accomplish the goals you set for this year. Don’t be afraid to remove unsuccessful initiatives.
- Have a good understanding of what the partners of your firm believe is a good investment of firm revenue in marketing. This helps provide a guideline of where you should be before you meet with your managing partner. At my firm, we use 2.5% of firm revenue on marketing as a good guideline.
Planning your marketing budget for the year can be a daunting task, but once you understand where you were, where you want to go and how to get there, putting processes in place will make your budget planning less stressful.