The past year has been a brutal one for the AEC industry, to put it mildly. Overall, as a response to the tough times of 2009, cutting marketing expenditures probably made good sense for a lot of firms.
However, as many firms look towards the new year with the clear goal of “we need to do better than last year,” it’s crucial that they prepare a detailed marketing budget. Marketing planning often falls by the wayside because of the high level of uncertainty, but at a minimum, a budget should be prepared to help guide spending decisions in 2010.
Why is a budget important?
Every project that you undertake as architects, engineers or contractors has a budget. Clients demand it so that they can plan, set aside funding and measure the project’s success. Marketing efforts should be no different.
Developing a budget ensures consistent activity. Relationships rarely develop from one call, one ad, one conference or one mailing. A budget, accompanied by a marketing plan, allows firms to outline multiple touch points with the same audience. A budget also provides a figure to measure effectiveness against. ROI is not the end-all-be-all of metrics, but it is one important yardstick to use when evaluating and planning your firm’s marketing efforts.
What do we base a budget on?
Depending on how detailed your firm’s business or financial planning process is, you should develop a marketing budget as a percentage of revenue, not just assign a dollar amount. Industry averages range from 5-10% of net service revenue. Those vary based on which survey you use or region you work in. You also have the choice of basing your budget on next year’s projected revenue or historical revenue numbers.
What should go into 2010’s budget?
Marketing next year will be mission critical, whether you believe that the market will have a drastic upswing or times will continue to be difficult. Coming out of a year like 2009, clients will have a built-up need for your services and funding will eventually come, so a detailed budget will help you make the most of tight marketing dollars.