Tag Archive for: budgets

When it’s difficult to plan, it’s tempting to just eliminate budgets, especially for marketing and PR agencies. In the short term, that might seem like a negotiable expense that’s fairly easy to eliminate. But if you’re working well with an agency, eliminating them will cost you more time and money in the long run, not to mention the costs associated with reduced awareness and sales. Instead of eliminating Most agency owners can show you why cutting back on marketing and PR will damage your brand, but what insider tips do agencies give to their existing clients when economics requires a marketing shift? For this article, we called on some of the most respected mid-size agencies in the United States and asked them what strategies they use to reduce agency budgets, so you can ask your own agency to help you.

Discuss your plans with the agency upfront. Getting strategic advice early in the process will help you avoid wasting the implementation budget later. Measure twice, cut once.Karl Sakas, Sakas & Company

Sakas, who uses his years in the agency world to consult with growing agencies today, suggests involving your agency at the highest strategic level from the onset to reduce agency budgets. Agency strategists may cost more hourly, but a deep, collaborative strategic understanding saves hundreds of wasted implementation hours, not to mention emergency charges. Sometimes there is this idea that withholding information from your agency will give you an edge in negotiations. But if your agency is really on your side, and really approaches the relationship as a partner, then that strategy could cost you. Most agencies can help you prioritize and refine a strategy to fit your budget during a recession.

Using agency as a consultative partner, rather than an implementation house Ross Johnson, 3.7 Designs, a Michigan Inbound Marketing Agency

When clients need to reduce budgets, Ross Johnson of 3.7 Designs suggests leaning into strategy with the agency, and sticking with outputs that have a longer shelf life. For example, instead of eliminating content creation, which is invaluable because it’s sticky, he says, “Take more of the content creation in-house. We advise on what content to create, and provide feedback after it’s created so the client receives 90% of the same value but at a lower cost.”  He also recommends focusing more energy on earned media and organic activities over paid spending, because it lasts longer and delivers more value.

Technology is your friend – Dan Serard, Cannabis Creative

“Following up with and nurturing leads can be time intensive,”

“We recommend our clients to invest in our email marketing automation services and prioritize automation strategy in addition to one-time or seasonal campaigns to get the most value out of our services. It’s not just about the immediate content output, but the long-term journey for your leads. As an agency, we set up our clients’ email systems in ways that work smarter, not harder. Email marketing automation can be an investment to strategize at the onset, but once running, generate cost-effective results that function in perpetuity. Automations can keep leads engaged and convert them into customers through a series of well-planned out messages, and do not require much intervention.”

Cut low-performing or time-consuming services. – Hunter Young, HiFi Agency, 

The longer something takes, the more it costs. If you have multiple layers of approvals built into agency work, then reducing those layers can save you time, and your agency can either refocus it’s efforts on more valuable outcomes, or they can reasonably count on reducing fees by the time saved.

Hunter suggests looking at an agency budget cut as “an opportunity to cut the items that were truly low-performing or low-efficiency for the agency/client (e.g. things that take forever to get approved).” Items that take multiple back-and-forths, cost the agency time, which translates to money for you.

Have the right people do the right work, – Stephanie Chavez President of Zen Media

Most agencies provide a blended rate for their services. Yes, a strategist is more per hour, but they aren’t likely to be spending 10-20 hours in your account every week. This is a spot that can create unforeseen costs when clients insist on using the strategist as a project manager. Indeed, a highly paid strategist should not be managing the project on a day-to-day basis, they should ensure the output matches the strategy.

As President of a PR and marketing agency for tech-driven B2B brands, Chavez is used to clients who expect smooth operations. She says when clients are looking for ways to save money, she doubles down on making sure the budget is used where it should be, with the right skill sets in the right place.

Use recessions strategically.   – Chris Shreeve PrograMetrix 

During a recession, there is less noise. PR agencies get cut and ad budgets get reduced. So using a scalpel approach to your budget can provide higher ROI than when the economy is moving in full swing. Plus, although consumers still consume, they’re more sensitive to getting the best product and/or the best price, so staying present is even more important.

“After all, consumers will still consume, even during a recession,while some brands may go silent, other brands see a pathway to make more of an impression on their target audience.”

 

Reducing your agency costs doesn’t have to be all or nothing. Working WITH your agency to find the sweet spot for your specific needs can be an excellent exercise in creativity. By shifting strategies, outcomes, and outputs, you can find the sweet spot that keeps your marketing and PR on track even during cost-cutting seasons.

How much should you use for cannabis marketing budgets?

You can see the cannabis market changing daily and yet we haven’t even reached anywhere close to a zenith in cannabis purchases. It’s easy to be lulled into thinking that a growing market allows you to limit your marketing budget. Unfortunately, no. Despite the growing businesses, success in the cannabis industry is no sure thing. So how can you take advantage of this growing market by really developing a foothold?

Establishing your brand and investing in marketing is going to be the difference between success and failure in the cannabis industry.

The cannabis industry is growing, but you need to establish your brand and foothold now to ensure you’re able to withstand the inevitable maturation and consolidation of the industry as regulations ease.

Fundamentally, the wine market is a great comparison to the cannabis industry because it’s an industry built around an agricultural product that’s highly regulated. There’s one glaring difference between the two: wine is a mature product, the market is educated about it and those who drink wine, know they like drinking wine. Drinking wine carries with it a certain lifestyle sophistication that some people aspire to, in other words, it’s a lifestyle product. Wine companies know investing in branding can make all the difference because the market is highly competitive and they generally budget 15%-20% of sales for marketing, this is a mature product with an established brands.  You’ll notice in the below infographic that recreational cannabis is larger than wine sales, but cannabis sales haven’t even remotely become mainstream or moved past the “stoner” lifestyle image. If you’re marketing to a “stoner” culture audience, then perhaps you can develop a budget that’s on the low side, but if you see only 10% sales growth, you’ll know what to expect.

But if you’re hoping to capture some of the market that lives beyond the “stoner” audience, then you’re going to need a bigger budget and you’ll need to think like a lifestyle marketer. You can bet that the cannabis industry is going to get incredibly competitive as time goes on. Establishing your brand and investing in marketing is going to be the difference between success and failure in the cannabis industry.

What should my cannabis marketing budget be?

Setting cannabis marketing budgets is no easier (in fact, it may be harder) than doing so for other industries and this is because of the multiple variables impacting this decision-making. We present these stats to you as a guideline to determining your marketing spend vs. sales growth.

Basically, ask yourself how much you want to grow and allocate an according percentage of your budget to the growth. You can’t expect sales to grow 100% with a 10% marketing budget. It may happen, but the more likely scenario is that by the time you realize it isn’t going to happen, you’ll be boxed into a budget that doesn’t support the other expenditures you made in anticipation of growth.

Your mileage may vary and we’re happy to talk to you about your specific niche in the industry to help you develop a plan if you don’t have one at all. Keep in mind if you’re in launch mode, your PR and marketing budgets should be on the higher side, which pretty much applies to almost every cannabis brand today.

Something else to consider are the advertising limitations facing the cannabis industry. Depending on your actual product, you may not be able to buy ads on Facebook and Google. Does that mean you shouldn’t have an advertising budget? No, it actually means you’ll need to reallocate what would be an ad budget to something else, perhaps social media marketing and community building or content marketing or public relations.

Understand this: if you don’t feel comfortable allocating this kind of percentage to marketing, it doesn’t mean you should pack up your bags and quit-it just means your progress will go slower and you should have realistic expectations.

How Long Will It Take for Marketing Efforts to Deliver Results?

There are numerous variables in the answer to this question. Including your customer, your product and your previous efforts. Let me assure you, with the right budget, all things are possible.

Marketing, PR and branding efforts all work together and they tend to compound, especially in the early days. The more marketing you do, the earlier the ball will start rolling.  You can do yourself some favors by tracking metrics along the way so you know you’re hitting the right mix of marketing and that your marketing dollars are being optimized. Consistency is key in marketing and PR, so plan for consistency with bursts of activity around your strategic sales times.

All that to say this, the bigger your budget as a percentage of sales, the faster you’ll see sales grow, so if you’re in a hurry, budget accordingly.

cannabis marketing budgets stats