Marketing Budgets: Market Building

In the last article I talked about the general components of a marketing budget. The first, and most important, is market building activities.

"But wait! What about generating leads! Making sales!" The danger of saying "most important" is that something has to be "least important" so let me explain what I mean: if you had no resources, nothing, and had to just do what you could, this is where I would recommend you start.

Here's how I described market building activities in the last article: "Basic market building is the foundation for everything you do. This is the unglamorous stuff that makes or breaks you: marketing research, basic public relations, and analyst relations if it makes sense for your industry."

When you think of your budget it's important to think about it in two ways. First, you want to think about how you will use all the resources at your disposal; not just your money, but your time, your staff's time if you have a staff, your connections with colleagues, and so on. From that, you can develop the formal budget - the document that meets the requirements of your finance folks to help them figure out how much you will spend, when you will realize those expenses, when you'll actually pay for them, and so on. That document is important but as a marketer you need to think about the overall plan and the activities that may not hit that formal budget.

So let's take the items I talked about one by one.

Market Research: at a high level, I mean "building a picture of your market that tells you what the size of the market is, how it's segmented, what segments you can address, and what the trends in those segments and the overall market are." In other words, know where you are going so you can figure out how to get there.

You may have started a company because you had a great idea. Market research is where you do a complete reality check and make sure that your great idea is also the kind of idea that people are going to put down money for. It's also figuring out which people of all the potential customers are going to do that now, which will in the future, and what other options for spending their money are out there.

Depending on your means and your needs, this might mean doing primary research with the help of a research firm, or (more likely) purchasing reports on your market that someone has already written. It can also mean meetings with the analysts that cover your space.

While all of that research is helpful, don't forget that it can also be wrong. Analysts made bad predictions. Make sure it passes your own "smell test." And consider what it means for your own business.

If you can't afford all of that, there are ways to do your own research. Not that long ago I became so frustrated with the available data on a specific managed IT service that I gave up on getting what I needed from an analyst or researcher publications. They weren't segmenting the market in ways that let me identify the people we could sell our services too. So I took a clean sheet of paper and started with a simple source of data (US Census figures on small and medium sized businesses), made some assumptions on adoption of our service based on my own experience in the space, and came up with a segmentation model and market sizing estimates that I'd put up against what the analysts were saying any day. Don't underestimate your own intelligence and knowledge - but don't forget to test it against what others have come up with.

Public and Analyst Relations: You want the "thought leaders" in your space to be talking about you. For B2B markets that usually means editors and analysts who cover your space. But the concept applies to other markets as well; if you are opening a pet day care service, your thought leaders might include the lifestyle writer for your local paper, the president of a local kennel club, or anyone else who is recognized as an authority in your market. It's important that these people know who you are, know why you're unique, and can talk about you. In some markets mentions by thought leaders can bring immediate sales; in others they simply get you on the radar of potential buyers.

Even if you can't afford a PR firm to execute a full campaign for you, they key people in your business can get out there and talk to them. This is a step that's often neglected, but will help you time and again as you take advantage of opportunities for news coverage, are asked to provide industry references for you business, or simply want some mindshare among your buyers. If you can't pay someone to do this, you should budget some of your time to make the calls and set up the meetings to accomplish this. (And you want to be sure to do it correctly - a topic that would take much longer than this article to cover adequately.)

These are not activities that bring in sales leads or that give you nice ad clippings to show around the office. They are, however, fundamentals that will keep your business on course and in the minds of your next customers.