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Marketing Budgeting – What Happens When You Cut Back

October 25, 2010

Fall brings with it not only harvest but budget season as well. There’s been a fair amount of discussion amongst marketers about what is and isn’t working out there. Anything internet-oriented shows signs of promise; any traditional print vehicles such as newspapers and magazines are getting less and less successful at producing good results. No surprise there.

What I don’t hear much about is what happens when you don’t go full out in any given marketing vehicle. What I mean is: no one is talking about what happens when you don’t actually fully immerse in any one campaign – the gap. Just as dipping your big toe in the water does not qualify as participating in the 50 meter freestyle race, sending out one letter also doesn’t qualify as actually running a viable direct mail campaign. You’re just not really in it.

Here’s a hypothetical example. We all know the rule of thumb in direct marketing: One percent response rate used to be considered superb. In these economic times half a percent would likely be considered excellent. Now this isn’t on one letter. Another rule of thumb in this game is that it takes a minimum of seven to nine impressions on the recipient before expecting a “typical” result (and often fifteen to twenty). Therefore, if you’re mailing to 100 recipients, you’ve got to send something to them upwards of seven to nine times to expect, at best, half a person to buy! So your first problem is not mailing to a large enough target market; the second problem is lack of repetition. And yet the money’s been spent. Clients expect results.

What happened? First the client complains they can’t afford seven to nine postcards, letters or other type of mailing pieces. Yet they want the same results with just one mailing! So they insist upon going down this road even when you know it’s doomed. They spend the money on preparing the mailing, the cost of production (if it’s a postcard or they’re mailing a brochure) and materials, and finally the cost of postage. And the results? Zip. Nada. Zilch.

Why? For those of us in the marketing biz we know the answer: It’s simply not enough. And this is only a tiny, snail mailing campaign. The same is true if you only distribute an email newsletter twice a year, or post to your blog every other month. Maybe you only contact your existing customers once or twice a year when you have a new product to introduce or your once-annual sale announcement. It’s simply not enough to motivate the buyer. The client is sure since you’re doing something they’ll get results – but not if it’s not enough of something to get you above the radar.

So when a client chisels away at your marketing budget, expecting slightly less results than if they’d financed the campaigns you proposed in full, they don’t realize that there’s a precipitous drop off. I liken it to a car with a high clutch. The client thinks if you press the gas pedal and let up on the clutch just a tiny bit, they’ll get a bit of traction. In fact, it doesn’t work like a straight line graph. It’s more of a bell curve. What may really happen when you let up just a bit is no traction at all – not until you really let up on the clutch significantly to get past that curl in the end of the bell curve. Then the car may begin to move forward.

So when you’re budgeting for 2011 and the client says, “I’ve no money for those big campaigns,” then just pick a few campaigns – but do them all out. You’ve still got to dive off those racing platforms at full speed to stay in the race. No dipping your big toe in the water. You haven’t got a chance! Do one campaign and do it all out as if your life depends upon it. Because it does.

You can’t expect the car to move forward until the clutch engages. Throwing just a little bit of money at a marketing campaign will not produce “a little bit” of results. It will produce nothing. It just doesn’t work that way. It’s all or nothing in the dog-eat-dog world of marketing. There’s no room for hesitation. As George Clooney said in a certain movie: “You’re either in or you’re out. What’s it gonna be?”

That’s right. I couldn’t resist the opportunity to throw in a picture of George, but it does rather underline the point: Do it full out; do it well; do it with 100% conviction or else don’t bother. You’ve wasted your money if you don’t.

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