The Impact of Hidden Marketing Expenses
In KEO Marketing’s Marketer’s Guide “5 Critical Steps for Planning Your 2017 Marketing Budget”, we talk about three marketing strategies that a company can pursue; lean, target or stretch. A stretch strategy is used when the company is planning to introduce a significantly innovative new product or make a move to dominate a market segment. When that happens significantly more marketing is needed and budgeting needs to reflect that increase. Many times the anticipated marketing budget impacts are allocated for, but there are often unexpected marketing expenses that are hidden in the strategies that may not have been thought of initially, but will impact the marketing department later and cut into the overall expenses.
Here is a scenario: We will say that that you are planning to launch a new product family. It is a very innovative product so you know you are going to have to promote it heavily in order to build awareness, trial and preference. Here are some hidden expenses to consider.
Online marketing strategies:
- Anticipated expenses: new and better Search Engine Optimization (SEO). More display ads on an increased number of targeted websites, more marketing directed at influencer marketing and industry experts.
- Hidden expenses: more personnel to implement this. Printed literature. Expanded tracking, data analysis and record-keeping. Training of inbound personnel to answer questions and inquiries. Re-vamping the website will require a web designer, an art designer and a copywriter, which means time lost to training and ramping-up of the new personnel.
Outbound marketing strategies:
Trade shows and conventions:
- Anticipated expenses: larger booth, more videos, printed handouts.
- Hidden: extra printing costs due to demand, shipping printed materials, training sales people, outbound calls to schedule influencers into meetings with the sales people at the trade show, shipping of product demo units and after-show support for phone calls from attendees.
Obviously we cannot cover every expense here because every situation is different. What is important to remember is that, when budgeting, it is wise to be aware that there are always a lot of hidden expenses that can impact the spending and therefore extra budget should be allowed. When that is kept in mind there will be fewer surprises which can negatively impact the budget. To learn more about strategic budgeting for 2017, download the free KEO Marketing guide “5 Critical Steps for Planning Your 2017 Marketing Budget.”
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