Micro Marketing Budgets
Marketing Methods and Budgets
Would you be surprised to hear that DFS (the furniture retailer) is one of the UK’s highest spenders on TV advertising? It’s difficult to find a commercial break on any channel that doesn’t feature the latest ad from the ‘always running a sale’ giant, so I suppose you wouldn’t be surprised at all.
What might surprise you is that it spends more than £90m per annum on mixed media marketing.
What could be the driver behind such a huge spend?
Well, turnover of £670m with EBITDA (earnings before interest, tax, depreciation and amortization) of £86m in 2013 clearly shows that DFS have a formula that works. The fact that their product is constantly being put into your line of vision means that the tag line ‘think sofas, think DFS’ tends to stick with potential buyers.
With 97 stores across the UK and Ireland they also offer reasonable geographic accessibility to around 90% of their target market, making it easy for customers to buy from them.
DFS know exactly who their customers are and how to appeal to them. The cost of marketing is obviously an intelligent spend that consistently yields results.
Yes but what has DFS got to do with my business?
You may be wondering what this has to do with your business, where marketing budget is what might be left at the end of the month when all the rest has been paid, but the truth is that without marketing there are no sales. No sales means no budget for marketing or anything else. Sales are what drive your business and marketing drives the sales process. Its process driven for measurable and predictable results and often overlooked by small business owners who are often more invested in new ideas than selling the products and services from the ones they already have. 10% of all sales you do make into your marketing budget will drive results, the only thing that won’t is not spending anything.
Of course it’s also helpful if you have people at the end of the process that can sell, or at least place the customer into a ‘ready to buy’ frame of mind. This was undoubtedly another reason in the decline of Jessops, as its stores were staffed primarily with photography enthusiasts and not sales people. Since Peter Jones stepped in to ‘save’ the brand the company has opened more channels to buy, including telephone ordering and ‘buy online and collect in-store’. The latter will offer savvy salespeople with opportunities to up-sell and cross-sell complementary products and accessories.
If you’ve wasted time looking at more successful competitors and thinking ‘my stuff is better than theirs, how come I am not selling as much?’ it’s time to stop and focus your attention on what you haven’t been doing enough of – marketing. You can make a massive impact even with a micro budget and over the next month I will be looking at well under £100 marketing spend items to get you going.