5 ways to find waste in your marketing budget

1. Not tightening your target.
Most marketers focus primarily on acquisition or lead generation. As a result, making acquisition goals often requires an aggressive go-to-market approach. There is a tendency to do some level of segmentation, or even predictive modeling, but not necessarily follow-through on the findings.

Predictive modeling can really help differentiate between prospects who are most likely to respond to your products and offers and those who aren’t. Yet how many times have we all sat in meetings and heard someone say, “Can’t we find more prospects? We need more leads on the top of the funnel, so that by the time they convert, the numbers work.” The reality is that targeting a smaller population (as defined by a predictive model) will yield a higher take rate. This step in reducing waste requires discipline.

Today’s customers expect marketers to be relevant. Tightening your target can also provide you with the ability to get more specific. Customers expect companies they do business with to know something about them. Relevancy also translates to better results and increased efficiency.

2. Not investing in email or mobile phone data collection.
At first glance, this doesn’t sound like waste; it sounds like another expense item. The reality, though, is that waste occurs when marketers can’t reach their customers or prospects directly. And email is currently one of the most efficient vehicles for reaching customers, with SMS starting to get more traction. If you don’t have a decent percentage of email addresses, or don’t have a strategy in place to capture and connect mobile phone numbers, you can look forward to years of bloated marketing budgets.

One of the biggest challenges in every budgeting process is to balance short-term needs with the long-term bigger picture. From a budget standpoint, there is always pressure to deliver this year. Making this year’s numbers can often feel in conflict with planning for tomorrow.

3. Lack of effort against current customers.
Most people are familiar with the old adage, “Acquiring a new customer costs more than keeping an existing customer.” One of the biggest ways to ensure your net number of customers increases year over year is to ensure that retention rates are strong. For many marketers, this is called the “fixing the leaky bucket syndrome.”

If you don’t have any dollars allocated to retention, you are likely going to force your acquisition dollars to work harder than they need to. This creates waste in your marketing budget.

4. Not spending a tiny bit more to optimize your current marketing investments.
Many marketers have constant pressure to try new things. Management is currently asking, “What new tactics are being tried this year?”

The reality is that many marketers aren’t spending enough time optimizing their current marketing activities. Investing a little more in testing and enhancing current tactics could provide a greater return on investment than launching completely new tactics. This lack of marketing optimization creates one of the greatest marketing budget wastes. The lack of marketing optimization basically translates to not fully realizing the potential of assigned budget dollars.

Companies spending more than 25% of their marketing budgets toward optimization are twice as likely to enjoy high conversion rates, according to a recent study conducted by Adobe. This uptick in conversions increases the return on marketing investment and can improve the effectiveness of your marketing budget.

5. Spreading yourself too thin against too many tactics.
I tend to be a fan of “Do it right or don’t do it all.” Unfortunately, many marketers feel pressured to do more and more from a tactical standpoint. They are constantly being asked, “How are we using mobile?” or “What new tactics are we implementing this year?”

Spreading your marketing budget too thin has one critical flaw: It is likely that you are diluting the effectiveness of certain vehicles. And by diluting the effectiveness too much, increases the likelihood that certain tactics simply won’t perform.

You can equate this to a visit to the gym. You go to lift a weight that is too heavy and you can’t lift it at all. In the course of this exercise, you strain a muscle. You now have wasted this workout and future exercise sessions. Sometimes doing too much is detrimental.