Any media partner working with a client needs a solid understanding of their goals--and, knowing their budget is an important part of that. Each marketing campaign starts with a budget, usually one based on the client's current financial status and overall goals for the campaign. When you share your budget, that will lead to proper planning by your media partner because they are able to point you in the right direction. By developing a strong level of trust, it's possible to develop a better understanding of exactly what each client needs.
Deciding Your Budget
When you’re deciding on your advertising and marketing budget, it’s important to consider key factors like your average sales, net profit, and the value of a lifetime customer. In order for your budget to allow your marketing goals to be successful, it’s important that you have the right amount of funds allocated to those efforts. By considering these key factors, you are able to decide on a budget that will meet your needs.
The average sale made by the business. Calculating the average value of a sale doesn't just help you better understand the worth of each customer brought in through your marketing efforts. It also helps establish how much you can afford to spend to generate new customer traffic, which will be helpful when deciding on your budget so that you can see how much is needed for marketing and advertising purposes.
Net profit. Your net profit can help establish your budget as well as what you actually make in sales, once you've taken out all of your expenses. Net profit subtracts the cost of the actual goods and services, wages for employees, and other costs associated with maintaining your business, including advertising, and lets you see exactly what you have the potential to make--including calculating the return on your media investment so that you can decide on how much to budget for marketing.
The lifetime value of a customer. A one-time sale might not be an accurate picture of what a business will gain from each new customer. Does the business offer products or services that may bring the customer back repeatedly, increasing lifetime value? How many purchases do customers usually make over the course of their interactions with your business? If you have customers with a high lifetime value, it can help offset expensive marketing campaigns or low initial purchases. When you keep this information in mind, you can see how much it takes to bring in a new customer, and what it takes for them to become a lifetime customer.
Why Sharing This Information is Important
When working with a media company, both partners need to understand the financial data that is most relevant to the business and to each advertising campaign. An ROI calculator can give you a basic understanding of what each marketing campaign has the potential to gain, but it starts with a solid understanding of the business's financial status. Consider:
Sharing information makes it easier to plan. You have a number of very specific requirements and goals for your marketing efforts. Sharing them with your media partner makes it easier to develop a solid plan based on those goals.
Open communication can build a better campaign. A trusting relationship is critical in helping you meet your overall media goals. When you have open communication with your media partner, you will be able to collaborate more efficiently and effectively when working on your campaign.
The information helps your media partner determine what is needed to break even and see ROI on a campaign. When you embark on a new campaign, you want to be sure that it's successful--and providing that financial data can help ensure that success.
How a Media Partner Can Help
When your media partner uses the above information and there are open lines of communication, it can help to create a campaign that will work towards the goals you have for your brand. The right media partner will be able to look at your goals, your budget, and your target audience to help you make the best decisions.
Analysis and discussion. Clients need to analyze the value of an average sale, their net profits, and their lifetime client values to create a budget that allows their clients to succeed based on what they can afford to put toward their marketing efforts.
Strategic plans. Media partners want to create a strategy for each campaign that allows their clients to reach their desired goals within their budget, based on shared information. Each media partner should take care to respect those goals and finances.
Ensuring each client gets the most out of their budget. It's important to analyze the potential return on investment as well as each client's goals to ensure that they get the highest possible ROI for their media spending--and an effective media partner endeavors to ensure all of those goals are met.
Making the Most Out of Your Relationship with Your Media Partner
Opening a discussion about finances with a media provider can be difficult. By answering these questions, however, you will find that, as a business owner, you can get a much more effective media campaign that is more likely to meet your specific needs. That trusting relationship with your media partner can go a long way toward helping you approach your marketing goals transparently and openly--and increase the odds that you'll get the results you're hoping for.