Small Business Marketing Blog from Duct Tape Marketing

What a great list of ideas!

I agree mostly with David and Simon, however. I'd invest the money into slowing down, thinking and figuring out who my company is...really. And I'd talk to A LOT of my customers to confirm what I found.

Then I'd get my employees away from the business, to spend time thinking about who we are and what we need to do to make sure we are truthful in everything we do. Maybe somewhere along the line, I'd fire a few people who don't have the vision, the passion or the ability to make things happen. And I'd hire others who demonstrated those abilities. I can always train them to give them the skills needed.

Then I'd speed up and broaden my testing of ideas...make mistakes faster as David, I think, wrote.

Then I'd put the pedal to the metal on the strategies and tactics that worked best, especially those that let me keep a closer watch on my customers to understand what they expected from me and warn me when I let them down.

Ah, what a nice dream.

-Mark

"Web Experience can be direct Target Marketing & lead to competition regionally for the Professional Services Industry"

A note about marketing for "Professional Services" locally. Businesses like: law firms, insurance firms, dental firms, chiropractors, mortgage firms, doctors and medical specialists, banks :: the trend is that businesses outside the local "town" are reaching consumers through websites.

Once local businesses only dealt with competition locally, with the help of Google- consumers can easily find Professional Service firms that have a better online presence than MANY local firms.

This fact means that local professional services firms may be unknowingly loosing clients to outside professional services firms that have a better online experience for their prospects.

Web SEO, Web Design, Easy Client Web Experience and Interaction- are all marketing issues that are and will continue to be able to recruit a new client to a business that is outside the local geographic town.

I found a good investment lawyer that way, even though there are several available to me locally- the web experience (marketing) that I found led me to do business with lawyers 60 miles away- instead of taking my business locally. Local law firms did not have a web experience that communicated: easily, intelligently, and showcased their team of lawyers (staff) in a professional easy experience for me.

So my business went to a professional services firm 60 miles away. We communicate through email, almost exclusively, and sometimes (rarely) over the phone.

The entire web experience (Google search (find ability), web design, web communication, and showcasing staff talents) will continue to recruit consumers like myself that use the internet to find professional services online.

I live in a small town, yet Indianapolis is only 60 miles away- so many professional service firms are and will continue to loose business (to internet users like myself) unless their entire "web experience" is (1) easy to find and (2) communicates trust and credibility. Brian

As a small business (with small business customers), I can't quite wrap my brain around the concept of $1,000,0000 for marketing. Heck, when I was working for a marketing trade association, I had event marketing budgets as low as $100!

Ultimately, successful marketing depends on what kind of business you are in (mass merchant, or one-on-one consultant), what your goals are, and which methods (direct mail, google ads, referrals, etc.) are most likely to achieve those goals.

For example, I could theoretically use that money to buy a single 15-second Super Bowl ad, but I don't think that would be the best way to reach my target market. Therefore, I'm much more focused on building relationships, providing useful content, and creating a referral system.

The philosophy behind a question like "if you had "x" million, what would you do" - is one that many philosophers and authors use to help people find their ultimate "dream".

For example- if I was given "x" million dollars, my real actions would not be to get caught in the day-to-day running and striving to make a business develop and become successful. Meaning, that my desires are not "the creation of a business, and all the striving involved" but becoming financially free enough to live the "life of my dreams" - which probably would not include a business.

As my financial situtation doesn't enable me to "live my dream life today" - the business is only the catalyst to reach a cash-flow point (passive hopefully) that will empower retirement "to live the lifestyle I really want".

The "business" is only the means to which I may be able to create such a cash-flow, and then move toward my early retirement dream- "to live my dreams".

If I was lucky enough to be a Bill Gates, I probably would have retired after the first 5, 10, or 20 million. At that point I would rather pursue "dreams" rather than "business".

I think this is an interesting point. Brian

Man - this is great stuff - thanks for all of your thoughtful answers - some of you should write a book!

It depends was always the first best answer in my opinion, but the detail and thought around this has been incredible.

I need to do some kind of ebook with this - more to come. I'm open to any suggestions on the best way of sharing these comments with more people.

Wow. There are some rather complicated answers above. I have a small business and nearly all of it was realized through relationships: people we worked with in the past and the people that they know and referred.

With 1 mil I'd do the following: I'd take 200Gs and invest it using the proceeds of the investment for future marketing endeavors.

With the rest I'd organize free "seminars" or "trade shows" for our particular vertical that we're targeting. I'd invite other business who provide corollary services to the same vertical to create presentations / displays.

Since we're in I.T. I'd use this opportunity to show how we can tie all this technology together and in the process hopefully establishing relationships; both the prospects and with other vendors - all the while creating a highly useful and educational experience.

The goal of this effort would be to provide a free utility (education) for our potential customers, not to mention a nice breakfast/lunch or dinner. For the other "vendors" it'd provide an free opportunity to market themselves. Finally for us - it would allow us 1) create personal relationships with both the supply and customer side 2) create a favorable environment in which to present ourselves and our business.

In the end the whole "market space" (except our competition of course) will gain from this and I'm sure many relationships will be created and all of them will point back to us as the catalyst.

I don't know if that's a wise way to blow 800Gs, I'm an IT guy. But since we always operate on the principle of providing value - this type of marketing offers value to the target. They can't get that out of SEO, fliers, nice graphic design, good copy or many other typical marketing efforts.

With 1 Million there are many things I would do. Yet it would take me a few years, perhaps 7-10 to use all the money.

1) Hire a expert consultant in advertising and marketing that knows my niche business very well- to update and revise my businesses image, business plan, and set up a business development plan. Cost Est $5000

2) In the first year I would hire one sales person that would be in charge of all sales. Cost Est $50,000

3) Also in the first year I would outsource my sales tools making, and produce several videos and a media kit - available to the salesperson and also viewable online through my website. Cost Est $10,000-$20,000

4) Next I would find the best outsourcing copywriters, graphic designers, and webmasters- to improve my brand image and also create a new website. Cost estimate $7000

5) Next I would develop a team of advisors paid directly to provide insights on the businesses efficiency, results, problems, and automation. Cost Est $6000

6) After running the business in one city, I would implement the business development plan, and increase my business into 3 other markets. Cost Est $10000

7) With all this done, I would run the business in the first market, acting with the salesperson, clients, and advisors, and document "how well the first market ran"- and use this information for planning the next 3 markets.

8) First year costs- $98,000

9) Gross Sales first Year- $21,000

10) Gross Sales second Year- $84,000

11) Gross Sales third Year - $147,000

12) Gross Sales fouth Year - $210,000

At this point my business would be running in 10 cities, the cash flow would be such that the only persons on the pay roll would be the owner, salesperson, and the advisors. Their pay would be:
Owner - $104,000
Salepersons- $100,000
Advisors- $6000

After developing the business into ten cities I would look at licensing the business to publishers- who would use their own copywriters, designers, webmasters, direct mailers- so in the eleventh (11) year I would license the entire business for a fee of $10,000 per city- and the business would be entirely run by the publishers, I would collect a yearly license fee of $100,000- and possibly only be needed for consultanting. I could easily live off of $50,000, investing the rest each year ($50,000/year)- and then seek to find another publisher to run 10 cities in year 12, raising my passive income to $200,000 per year. Ah, aren't theoretical models so fun and easy? Brian

With 1 Million there are many things I would do. Yet it would take me a few years, perhaps 7-10 to use all the money.

1) Hire a expert consultant in advertising and marketing that knows my niche business very well- to update and revise my businesses image, business plan, and set up a business development plan. Cost Est $5000

2) In the first year I would hire one sales person that would be in charge of all sales. Cost Est $50,000

3) Also in the first year I would outsource my sales tools making, and produce several videos and a media kit - available to the salesperson and also viewable online through my website. Cost Est $10,000-$20,000

4) Next I would find the best outsourcing copywriters, graphic designers, and webmasters- to improve my brand image and also create a new website. Cost estimate $7000

5) Next I would develop a team of advisors paid directly to provide insights on the businesses efficiency, results, problems, and automation. Cost Est $6000

6) After running the business in one city, I would implement the business development plan, and increase my business into 3 other markets. Cost Est $10000

7) With all this done, I would run the business in the first market, acting with the salesperson, clients, and advisors, and document "how well the first market ran"- and use this information for planning the next 3 markets.

8) First year costs- $98,000

9) Gross Sales first Year- $21,000

10) Gross Sales second Year- $84,000

11) Gross Sales third Year - $147,000

12) Gross Sales fouth Year - $210,000

At this point my business would be running in 10 cities, the cash flow would be such that the only persons on the pay roll would be the owner, salesperson, and the advisors. Their pay would be:
Owner - $104,000
Salepersons- $100,000
Advisors- $6000

After developing the business into ten cities I would look at licensing the business to publishers- who would use their own copywriters, designers, webmasters, direct mailers- so in the eleventh (11) year I would license the entire business for a fee of $10,000 per city- and the business would be entirely run by the publishers, I would collect a yearly license fee of $100,000- and possibly only be needed for consultanting. I could easily live off of $50,000, investing the rest each year ($50,000/year)- and then seek to find another publisher to run 10 cities in year 12, raising my passive income to $200,000 per year. Ah, aren't theoretical models so fun and easy? Brian

Spend a Million Dollars? Harder than you think?

Writing from my desk in the UK, and looking at the Dollar/ Sterling exchange rate… not a challenge! Even absconding with it and setting up a home in Acapulco on £500,000 isn’t that attractive anymore! Nowadays , it’s just a few days work for the David Beckham’s of this world. So, back to reality, and Plan B.

So, what is the ‘best’ use of a marketing budget? Understanding where it fits into the strategic business plan is the first step.

Is it about ‘awareness’? (More difficult to measure).

‘Bits of Paper’ (Lots of evidence, but how effective?).

‘Income and results’? Now we are talking!

Some years ago, I saw a statistic that has always stayed with me:

An average business spends six times more to attract new customers than it does to keep old ones. Customer loyalty can be worth 10 times the price of a single purchase.

If we delight our customers, they seem to spend more of their ‘wallet’ with us. How strange! And delighted customers are much more likely to refer us to their Suppliers and Clients, if we ask them. So we have the opportunity to generate a ‘hot’ lead, as well as extra revenue! How much is that worth? So we need to spend some of our Marketing budget ‘delighting’ our Customers. We just need to work out how to do that.

We hear it all the time, don’t we. “The most valuable asset is our staff!”

So, what are our plans for ‘servicing’ this valuable asset? I bet the car fleet is serviced without fail. What about your ‘best’ asset?

Can we invest the marketing budget in them? WOW! A radical idea.

Not just the Sales Staff, but of equal importance, those who deliver ‘Service’ (whatever that means) to our customers. Anyone who touches a customer owns your business and has the opportunity to ‘Market’ it. And they will do it really well, indifferently, or really badly. How many ‘touches’ does your business have each and every day with existing and prospective customers? What is your propensity to ‘Market’ from within your business? So how much, and how well are you doing?

The question now becomes ‘what do your people need’? Think about it and you almost certainly already know the answer. If not, do the diagnosis. You also find out what will motivate them to change. Can the marketing budget help here?

My solution? Invest some of your Marketing budget in your people. How much of your marketing budget will you need? That depends on how motivated, skillful and successful your people are already.

How much will it deliver? The big question for you is: are you more likely to get a return on your Marketing budget by spending it with a third party, or your own people? And if it is the latter, how much additional revenue would you expect them to deliver? Would a 100% return on the cost in year one be an unreasonable goal? Now there’s a thought!

If I had a million dollar budget I would a) hire a small panel of experts in online marketing b) hire someone expert in print advertising

Then I'd focus on the top online media in my market (small business) and craft a low cost, far reach online campaign with the bulk of the money - comprised of text, banner and cpc/cmp advertisemnts; I'd also include sponsorships like maybe a smallbiztech channel on duct tape marketing or something

For print, I'd focus on small ads in small biz focused media, to reinforce my online campaign....

Ramon

I actually had the opportunity to answer this question for a $10 million home improvement company that spends over 10% of their revenues on advertising.

While I am constrained by confidentiality from sharing very much of our conversation, I will tell you this: my recommendation was to begin moving their budget gradually (10% in 2007 and more over time as the strategy proved itself) from mass-media radio, TV and newspaper advertising to specialized information-based marketing targeted at very specific niches.

I believe that $1 million spent on tightly-targeted video, audio and web information-based marketing systems would yield enormous results that would put more traditional shotgun-message approaches to shame. We shall see.

Ok,

1 million dollars.

If I had an entirely online business, I'd focus of three things only

1. Sharpening the user experience
2. Running multi-channel online CPA driven marketing programs
3. Develop a sustainable program to engage site members, build psotive word of mouth and contribute back to the wider community.

1. It might take the services of an extremely good IA, but the minute you ensure your website allows your customers to achieve their primary goals, easily and with the customer service to back it up, you've won half the battle of sustaining a long term business.

$150k

2. Use your money to market through the channels that allow you to at least measure if they're hitting your desired CPA. If this million dollars needs to be used to convince someone to give you another million, make sure you can prove the return on investment. You've kicked the tyres before, so hit hard those channels that return what you need to sustain growth. If it's search, refine your positioning, if it's behavioural targetting, refine your messaging and placement relevency, if it's print , STOP NOW, don't waste your money on traditional advertising when it's a non-traditional customer you're after.

$650k

3. Don't fall for the trap of thinking that buzz or WOM is like the AMWAY promise. People are more cynical now than ever. Build a mechanism to engage your customers and your own staff. We decided as a travel company to put back into the communities our travellers pass through. It means a great deal to our customer and even more to us. We developed the footprints charity program that that allowed our customers to make a micro donation to a sustainable community project around the world. What's $2 when you've saved $300? They voted not only with their wallets, but their mouths, so as much as we're thrilled that we're funding projects, we're even more happy that we've removed some of the cynicism of donating to charities, made the process transparent and watched our customers spread the word. You wont get that from an ad and your customers wont talk about it unless they believe you're in it heart and soul. You'll still need the $$ to build your program, but it will reap positive results for your customers, community 7 bottom line.

$199,998

Spend the extra $2 on a good cup of coffee, you'll need it.

Well, I think most of these posts have been murderously obtuse. This is very, very simple.

As a professional marketeer, I'm disappointed in my fellow marketers (if they are such).

Looking at the "box" from the outside, here's what anyone should do with $1,000,000 in marketing dollars:

Market as though your budget did not change. Market like your budget decreased. Put your money in a money market account and let it sit at 5% interest while you market like your entire world will collapse and vanish before your eyes if you fail with what you've got. This, as a principle, goes beyond strategy, etc. This is about guerrilla marketing, it's about working harder and smarter than others and about wanting success more than the next guy. What are you willing to do to succeed? Begin from the outside of the box and work your way in. Define what separates entrepreneurs who win from big corps that lose until something clicks. Make it click the first time. Research, research, research. Define and define some more. Talk to those who market without a budget. Talk to those who do have a budget. I would make the money, make me a better marketer.

I don't want to sound like Miss America, but perhaps I would give some of the money away. I have found that publicity is so much more effective than advertising. People nowadays see so many advertisements that many of them go by totally unnoticed. It would be a huge waste of money to just throw it all into advertising. However, when people see a small business giving back to the community and that small business plastered all over the evening news and morning newspapers, they tend to notice. It can be especially effective if you get publicity by giving a new product away because then people see that you have this new product that others might not have yet.

<pingback>...marketing budget? Harder then you think? John Jantsch wrote a great blog on What would you do with a million dollar marketing budget? to start everyone’s mind thinking, and writing from my desk in the UK, and looking at the Dollar/ Sterling ...</pingback>

Mmm this is a very broad subject and the solution is (as noted) dependant upon the business and its current situation.
The starting point will however, be the same, and that is to:
A. develop a comprehensive 'marketing plan'. This includes:
1. objectives
2. swot - internal and external analysis 3. objectives review
4. deciding general strategies
5. designing tactics (4 or 7p's)
6. documenting & communicating the plan
7. implementation
8. monitoring
9. evaluation

B. Develop an IMC plan involving analysis of the promotional mix:
1. advertising
2. direct
3. interactive/internet
4. sales promotion
5. publicity/public relations
6. personal selling
So what communication method or combination will be most effective in achieving your objectives. It could be 'adopting a cause' and pushing PR, or improvement to on-line, or training & incentives for personal selling representatives or ....

In order to effectively develop these plans, expenditure on primary & secondary research may be required. What we want to know are 'perceptions' and 'opportunities' within our market (or related markets) about our products and those of our competitors. This will lead to strategy and tactics.
Note: the marketing plan needs to include ROI information which may be short or long term e.g. long term: planned changes to customer perceptions (re the product or business); or short term: planned changes to current sales. Further, all marketing expenditure should be considered an investment.

The answer is in 'the plan' ....
Start with the basics and then determine the most appropriate and effective expenditure (investment) for your product, in your market, given your present situation, both physically and in the mind of your customer.

Great idea:

First: I wouldn't spend it. Spending is what the government does, and what shoppers do (and superbowl advertisers)

I don't want to sound too smarmy, but I'd INVEST it.

The mentality is different.

Think of it as: "I have 1mil to invest, what kind of return am I looking for? 2:1, 3:1, 10:1, 100:1?"

One earlier comment said "test more"- that's brilliant, then you can figure out the stinkers and the run with the winning campaigns.

But before I went and "invest" one penny, I'd invest in a "retreat" to get some thinking done. I find I make a lot more money when I think, versus just jump in without thinking.

Dave

The first thing I'd do with a million dollar marketing budget is HIRE MARKETERS.

I actually enjoy marketing very much but, as you suggested in a post earlier this week, John, I'd rather head up the strategy end and delegate the work.

I'd hire a *really* good team of people, pay them well, and give them a budget. I think a team that consists of a Direct Marketing Manager, an Online Marketing Manager and a Strategic Partnerships Manager could help me take my business to amazing levels.

You mean *apart* from making 1000 little LED men and leaving them scattered around a major city?

I think having that kind of money would make me braver with testing -- I'd test more lists, more offers, more campaigns. Fail faster, find out what works faster -- and then spend more money on what works best to get bigger, faster.

I'd then spend some on testing new product ideas and new campaigns for those ideas.

But I wouldn't spend it all right away, however tempting. It would just give me a bigger cushion.

Richard,

The heck with goals - bring on the Super Bowl Ad!

Great point - begin with the end in mind. What a great way to work backwards when determining strategy and tactics, and of course, how to spend a marketing budget.

Maybe you even decide not to spend it!

Keep posting those comments!

It would be great to have a million dollar marketing budget, but before you start allocating the money for different projects or initiatives, it is important to look at what business you are in and who you are trying to target.

A generic strategy does not work as it did years ago, so if consumers are your target, that requires a strategy that is different from businesses. Also, your audience or target population will also determine what channels to use - mass marketing or targeted markeitng. A great example is targeting consumers for a financial product. Targeting for a mid-level manager that might have an interest in a savings product will be much different than targeting for a consumer that does not have a bank account, but may have disposable income.

So, before you start spending your marketing dollars, find out what the goal is at the end of the year, who are you trying to target, and what action do you want them to take.

I agree a business needs to probably start off with clean, consistent branding however - and I am a novice so please forgive me but I suspect using some of that money to hire a few stellar writers to do buzz marketing and blogging could be valuable. I knew nothing of blogging until a client of ours insisted she wanted to do a blog. My partner and I initially thought "blog-shmog" - HOWEVER we did our research and we were amazed, totally blown away by the power of the blogosphere - We now have several clients who do blogs and we do blog based research and the buzz driven by blogs is very powerful and consistently amazes us - I would say some of that budget should go towards buzz marketing with blogs - but again I am a novice - one who is willing to humbly learn however.

For Me, I Would use the million dollar budget to build/improve the overall image of my business. Everything from print media to our website. I would also hire a good copywriter and a graphic designer. Once I had put all of this together I would start putting our name in places where people would look to find us when they want our services (Bath & Kitchen Remodeling) Our new website (RemodelCapeCod.com)and our fresh out of the gate Google adwords campaign is a great example of this.
Finally I would use a large portion of the marketing budget to build a database of folks who have used or are looking to use my services and I would reach out to them via email,mail etc. at least once a month. I would also look to partipate in high profile community activities.

We are actually working on making many of these things happen. A million dollar budget would allow us to do it faster, easier and more consitently.