Does your firm have a 2010 marketing budget yet?

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.

Know When To Say When – Research Responsibly

When it comes to market research, there is no shortage of information that would be helpful for your architecture, engineering or construction firm. Let’s face it…there is ALWAYS another competitor popping up, plenty more clients to chase, elusive funding streams, etc.

Who has time for all of that? Even with a dedicated marketing team in-house, there are deadlines to meet and proposals to submit.

I had a discussion with a colleague this week about just when to stop. How do you know when you have dug deep enough? If market research efforts can be contained and defined, they can be a lot easier to tackle quickly. Here are a few pointers that help me know when to say when.

1. Set time limits – Research is often about past performance. Digging back farther than two to three years for most things is a waste of time. Some government contracting info might be worth a deeper dig, if you’re looking at 5 year IDIQ’s for example.

2. Constantly ask yourself what question you are answering – It is easy to get mired down in everything that is out there. If all you set out to do was review info on your top five competitors, don’t get roped into looking up the top ten.

3. Think lowest common denominator – Only record info that you will be able to capture about all of your research subjects (whether they be competitors or potential clients). Research is most useful when you can compare it to other subjects. Set out to find the same ten pieces of info about all of your subjects, instead of just blindly recording everything you uncover.

4. Use other resources – If you are a busy principal, Marketing Director or Business Developer, you likely have a long list of questions you wished you knew the answer to…but just don’t have the time to find out. Hiring a third party to do market research makes a lot of sense – they have the procedures in place and often have paid-for-services that grant them access to information faster and easier. Don’t be afraid to ask for help!

The point of market research is to enhance your business’ decision making. It’s important to know when you have enough info to make an informed decision so that you can make it quickly and move on to the next task at hand.