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Marketing for Growth: Creating Your Marketing Plan (Part 3 of a 3-Part Series)

May 15, 2012

by Carol Aubitz, Owner C. Aubitz & Associates LLC and SCORE LancasterMentor

Carol Aubitz photo

Carol Aubitz, Owner Carol Aubitz & Associates, LLC and SCORE Mentor

Original post


Final segment of Carol’s 3-part series on Marketing For Growth

Many small business owners get overwhelmed when putting together a marketing plan. With so many daily tasks requiring their attention, creating a specific marketing plan never gets done. But not having a written plan is like starting out for a long road trip without a map or GPS to make sure you get where you’re going.

So the first thing you need to do is set aside a block of time where you make this your priority. Put your phone calls, text messages and emails on hold for a few hours.

I recommend that you set up your plan in a spreadsheet format, not a word document. The spreadsheet lets you focus on the specifics of your plan, enter formulas for your calculations and keep cumulative totals of your budget allocations in a very simple format.

Here is the structure I’ve found works best for a marketing plan spreadsheet.

Your first column is Sources. Enter all the generic source categories you plan to use for your marketing. [See my Muse from May 7 for an overview of sources.]

Under each generic source put a line for each specific source you are using within that category. For example, Social Media would be a generic source. Then the lines under social media might be Facebook, LinkedIn, Twitter, and YouTube.

Continue doing that until you have entered all the sources you plan to use for marketing to existing customers and attracting new ones.

When finished you’ll have decided where you want to spend resources to grow your business. Now it’s time to add the additional columns of data that make your plan meaningful. Here’s what they should be, left to right on your spreadsheet, and why you need them:

Release Date: Enter the date this specific marketing will reach the customer or prospect. For frequent contacts, such as Facebook, or on-going media such as billboard advertising, to keep the plan manageable, enter months, not days. This will give you timelines for a master schedule.

Cost: Enter the amount of money you are spending for that marketing source. Using the Facebook example, enter how much will you spend by month for each month you do Facebook marketing. If you outsource this enter the amount you pay someone each month. If you are doing it internally, enter the cost for the time spent by the employee who does your Facebook posting and management. For example, if your employee spends 5 hours a week doing Facebook postings and management, that’s 20 hours per month. If you pay that employee $31,200 per year (an hourly wage of $15), your cost is $300 per month.

Circulation: This is the number of people you will reach. This number is vital to measuring the reach and impact of what you’re spending. For sources such as Facebook, this should grow each month. For example, if you start the year with a Facebook fan base of 100 people, and you get 20 new fans each month, adjust the number each month for the growth. For more traditional media, such as a billboard where the media company gives you the circulation number, it will be fixed for that year.

CPP: This column is the Cost Per Person reached. If you’re spending $300 a month for Facebook, and have a Facebook fan base of 100 people you’re spending $3 per person per month. In broader media such as a billboard, you might spend $2,000 per month to get 1 million impressions. (Impressions are how many people pass that billboard based on calculated traffic volume.) So your cost per impression each month is .2¢.

This also helps you calculate the success of your marketing. For example, if your Facebook cost remains constant at $300 per month, and your fan base grows by 20 people each month, your CPP becomes lower each month. By the end of the year your Facebook fan base would nearly double.

Projected Leads: This is where you enter the number of contacts you would expect to get from the advertising source for the specified period. This helps you think about what your content should be to get people to respond. For example, if you expect 20 of your 100 Facebook fans to respond to your monthly postings, put that number here.

As your Facebook fan base grows each month, you should increase the number of leads you expect to get from the larger fan base.

CPL: This column is Cost Per Lead. It’s a formula that divides the cost by the projected number of leads. Using Facebook as the example, the CPL is $15 (spending $300 a month and with 20 fans making a contact).

Projected Sales: In this column enter the number of sales you expect to get from the contacts (leads) that came in. Continuing with the Facebook example, if you have 20 fans respond, and you expect 4 of those to turn into sales, enter the number 4.

Conversion Rate: This is a formula column that divides the number of sales by the number of leads. So your conversion rate for the 4 sales out of 20 Facebook leads is 20%. As your Facebook base grows, and your Facebook leads grow, your sales should grow as well if you maintain your established conversion rate.

CPS: This is a formula column that shows your Cost Per Sale. It divides the cost by the number of sales. If the Facebook monthly cost is $300 and you got 4 sales from it, your cost per sale is $75.

Projected Revenue Per Sale: Enter the amount of money you expect from each sale. You should have already calculated your average revenue per sale when you created your marketing budget so you can use that figure as a starting point. For example, if your average sale value is $123.99, enter that number. If you have planned specific offers that will change your average sale, enter the average sale based on the specific offer.

Projected Revenue: This formula column multiplies the average revenue per sale by the projected number of sales. So for your Facebook monthly marketing, it would be revenue of $495.96 (4 sales of $123.99 each).

Projected Gross ROI: This formula column calculates the gross return on investment from the marketing source. For the Facebook example, if you are spending $300 per month, and generating projected revenue of $495.96, your return on investment ($495.96/$300) is 65%.

Projected COH: This final column subtracts the cost from the projected gross revenue to show you how much revenue you’ll have to put to your Cost of Overhead, which is money for your operating expenses, people expenses and cost of goods. So your Facebook marketing would generate $195.96 per month, which would increase if the source delivers growth for you.

By now you should see the value of doing this plan. It requires you to think about your expectations for the results from your marketing. When you measure your actual results against your projected results you’ll see what is needed in offers and messages to get your sources to perform. You’ll also start to see which sources may look or sound good to you, based on cost or volume, but may not actually deliver the return on investment you need to be profitable.

Expect to make cuts, edits and changes to your plan until you have a plan that keeps your expenditures and projected results in balance for your growth needs. At the end of each month add a line to the plan that shows actual numbers for all the projected columns.

The first year you work with this process it may seem overwhelming. But once you have it established, you will streamline your planning for future years, and will actually speed up your company’s growth and profits.

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