Review 2021 Marketing Expenses

Take the time to review last year's marketing expenses. Here, we'l break down your marketing expenses by channel (both in terms of time and money) and ROL. ldentifying the Cost Per Hour of Marketing Activities Set an hourly rate for your marketing department to compare apples to apples. The best way to look at this is to review time tracking for your marketing team. If you don't have this data, you can estimate the amount of time that your marketing team spent working this year. How to Find Your Team Hourly Rate: 40-hour work weeks and 50 working weeks per year, each full-time team member had 2,000 hours of working time. Take that total number of hours and identify how much of this time was taken up by meetings, admin work,product development, training, and other non-marketing related tasks The remaining time is a safe estimate of how much time those team members spent on actual marketing activities. Combine the annual salaries of all of those individuals. Divide the salary total by the number of hours spent on marketing activities. The dollar amount is the cost per hour of marketing activities. For example, Paul earned $50,000 in 2021 and spent half of his workweek on marketing activities (1,000 hours). Paul’s hourly rate is $50/hour. We recommend doubling or tripling that number to account for office expenses, training, HR, management, etc. In other words, you might choose to value an hour of Paul’s time at $100/hour. Intergrowth Logo Business, Business Advice, Marketing Last updated: May 24, 2022 14 minute read Building a Strategic Marketing Plan for 2022 Your complete guide to building a strategic marketing plan for 2022 (from an agency owner who helps construct dozens every year). Pat Ahern, Intergrowth Pat Ahern Pat Ahern is a Partner/Growth Strategist at Intergrowth. He breaks down SEO/content marketing concepts and strategies into laymen’s terms to show you how to grow your business. Outside of work, Pat spends his time rock climbing, traveling, and enjoying the best IPAs that he can get his hands on. Building a strategic marketing plan How to Build Your 2022 Marketing Strategy (from an Agency Owner Who Helps Construct Dozens Every Year) It’s time to start thinking about how we should be spending our marketing dollars in 2022. That’s right: it’s time to start thinking about your 2022 marketing plan. I know, it’s a lot to think about. Fortunately, we’re here to share some guidance. We’ve helped hundreds of businesses review their marketing performance and build their annual marketing strategies. Today, we’re going to talk about how to create the right marketing strategy to help your business have a successful 2021. It would be foolish to write an all-encompassing article designed to give every business the exact formula to define their marketing budget. Every business is unique. There are far too many variables to consider to write a catch-all guide – let’s schedule a consultation call if that’s what you’re looking for. The goal of this guide is to identify the primary questions that you should be asking yourself when building your marketing budget and offering guidance on how to evaluate those questions. We’ll delve into how target growth rates, competitive landscape, and much more should inform the development of your strategy. Contents: The 6 Questions to Ask Yourself (When Building a Marketing Plan) How Marketing & Sales Interact to Drive Revenue Review 2021 Marketing Expenses Broad Suggestions for Your 2022 Marketing Efforts The 6 Questions to Ask Yourself When Building a Strategic Marketing Plan 1. How Much Did Your Company Grow Last Year? Would you be satisfied with seeing similar growth metrics this upcoming year? If so, ask yourself how much of your 2021 marketing strategy needs to change. Minimal movement in the competitive landscape could mean that copying your marketing plan from last year will get you 80% of the way there. 2. What Marketing Channels Drove the Most Value Last Year? We recommend breaking down the value of each marketing channel into two categories: marketing qualified leads (MQLs) and sales qualified leads (SQLs). Both channels are essential for long-term growth. SQLs-centric efforts (sales-centric blog content, Google Ads, etc.) are great for short-term sales and converting MQLs into sales over time. MQL-centric efforts (educational blog content, speaking engagements, etc.) will fill your pipeline and drive long-term growth. Every company will define these differently. Here’s a breakdown of how our team distinguishes these two: Marketing Qualified Leads MQLs are those that express interest in learning about our services, either through submitting a contact us form on our website or schedule a call through our chat widget. Sales Qualified Leads SQLs are leads that have proven BANT (budget, authority, need, and timing). In other words, an SQL at Inter is someone who: Will find more value from working with us than they will need to invest to work with us Is ready to commit to working with us in the upcoming 1-2 months Has the authority at their company to decide to work with us Has the budget to invest in partnering with us. We recommend identifying the top SQL and MQL drivers from 2020 and 2021. Focus your marketing budget on these two channels first (more on how to analyze these in our section about Reviewing your 2021 Marketing Expenses). 3. What is Your Growth Timeline? Do you need to see a 10% growth every month to keep your job? Does your team understand that exponential growth often requires a longer time horizon? Pay-per-click, or PPC, advertising (Google Ads, LinkedIn Ads, Facebook Ads, etc.) is a better short-term investment if you need to see consistent growth. Within a few months, you’ll have a strong understanding of the cost per customer acquisition (CPA) and will be able to ramp up spending accordingly to meet growth goals. For example, you may see that your CPA with Google Ads is $500. Knowing that, you can comfortably assume that investing $5,000 will yield ten customers. Long term, search engine optimization (SEO) and content marketing will help you to see exponential growth and much lower CPAs. A company investing in SEO vs. PPC could expect to see an ROI curve similar to this: SEO vs. PPC ROI (More on the ROI of SEO here) However, SEO results are less predictable on a day-to-day basis. Most SEO efforts take 3-6 months to see traction – which can be difficult to explain to a boss in the short term. 4. How Has Your Competitive Landscape Changed? Evaluate your competition and how each competitor has evolved: How has the competitive landscape changed over the past year? How do you expect it to change in the upcoming year? Have you seen signs that your biggest competitor is ramping up their digital marketing efforts? Have they started to gain more traction in organic search rankings? What are smaller competitors doing? Are they growing at an alarming rate? Run a SWOT analysis to see how you stack up against the newly updated competitive landscape. Strengths: which ones can you capitalize on? What value propositions are most meaningful to your ideal customers? Weaknesses: which should you focus on improving? Opportunities: what should you test out in 2022? Threats: what do you need to watch out for? 5. Is Your Market Saturated? Are you operating in an untapped market where you can collaborate with your competitors to increase the size of your industry? Or are you operating in a highly-saturated market where one customer for your competitor means one less customer for you? For those in untapped markets, look for opportunities to partner with your competitors on larger marketing campaigns to increase the awareness around your industry. For those in saturated markets, think about how you can improve customer experiences to retain existing customers. Think about weaknesses in competing businesses that you can attack to gain more market share. 6. What Did Customer Feedback Look Like Over the Past Year? Were customers happy with your products/services? Or did you receive a spike in complaints? Work towards isolating the biggest customer pain points. This could be: Product-centric complaints like lack of durability of your product. Sales-centric complaints like overpromised results from the sales team. Customer service-centric complaints like the inability to get answers in a timely manner to support questions. Great customer experience drives repeat and referral business. Providing a great customer experience is the backbone of many of the most successful companies in the world. Marketing will have an uphill battle ahead of it unless you put your target customer first. How Marketing and Sales Interact to Drive Revenue The next step to building out your 2022 marketing strategy is understanding how your marketing efforts interact with your sales efforts to drive revenue. The goal of marketing is to educate your target market on their pain points, develop a relationship between your target audience and your brand, and hand your sales team smoking hot leads. These goals are part of a predictable process. Borrowing a graphic from our friends at HubSpot: Buyers Journey A potential customer realizes that they have a problem or need. They start researching the problem to learn more about the issue. In the process, they uncover several potential solutions. The potential customer evaluates those solutions and decides on one. Later, they reflect on whether their choice solved their problem. If it did, they are likely to use that solution again and recommend the same solution to friends. (More on the sales funnel here). Most marketers break those customers into the following groups: Marketing Qualified Leads (MQLs) – people who make an effort to learn more about your solution. Sales Qualified Leads (SQLs) – people who are very interested in your solution as the potential cure to their problem. Customers – individuals who pay for your solution. Referrers – people who love your solution and go out of their way to suggest your solutions to friends who have the same needs. MQLs, SQLs, sales, and sales funnels are most commonly referred to in businesses that have a long sales cycle (3+ months). Businesses with a shorter sales cycle and smaller average order values can still employ this mindset. However, businesses with lower average order values need to focus on how to automate as much of this funnel as possible to make it sustainable in the long term. For example, our friends at Brevitē might describe email subscribers as MQLs and SQLs as people who add items to the shopping cart on the Brevitē website. Review 2021 Marketing Expenses Take the time to review last year’s marketing expenses. Here, we’ll break down your marketing expenses by channel (both in terms of time and money) and ROI. Identifying the Cost Per Hour of Marketing Activities Set an hourly rate for your marketing department to compare apples to apples. The best way to look at this is to review time tracking for your marketing team. If you don’t have this data, you can estimate the amount of time that your marketing team spent working this year. How to Find Your Team’s Hourly Rate: Assuming 40-hour workweeks and 50 working weeks per year, each full-time team member had 2,000 hours of working time. Take that total number of hours and identify how much of this time was taken up by meetings, admin work, product development, training, and other non-marketing related tasks. The remaining time is a safe estimate of how much time those team members spent on actual marketing activities. Combine the annual salaries of all of those individuals. Divide the salary total by the number of hours spent on marketing activities. The dollar amount is the cost per hour of marketing activities. For example, Paul earned $50,000 in 2021 and spent half of his workweek on marketing activities (1,000 hours). Paul’s hourly rate is $50/hour. We recommend doubling or tripling that number to account for office expenses, training, HR, management, etc. In other words, you might choose to value an hour of Paul’s time at $100/hour. Identifying Total Costs of Marketing Expenses Now take that dollar per hour total, billboard expenses, Google Ads expenses, and more. Break these expenses down by advertising channel, and then identify the primary goal for each advertising channel. The primary business goal: Of TV advertisements might be to drive brand awareness Of email nurturing campaigns might be to convert MQLs to SQLs Of content marketing might be to drive MQLs Of a trade show might be to book sales meetings Building Your Marketing Goals Identify 1–2 primary metrics that can be used to evaluate each marketing objective. Review results from last year to identify the count of each of those metrics that each channel brought. Based on expenses allocated for each channel, you can now break down the exact cost per goal completion for each advertising channel, as well as the estimated value per goal completion.