Budgeting a Yearlong Marketing Plan
Roughly three years ago, during her first years as marketing director for Pickering’s Auto Service, Taylor Pickering planned out her marketing schedule in blocks of 3–4 months at a time. Then after those few months were over, she would see if she wanted to make tweaks or changes.
She eventually found this took too much time during the year, especially as her family’s operation grew to two Denver-area shops, and Taylor decided to map her entire marketing plan out a year in advance.
“After a while, we got to a point where we decided to do it for the whole year for expenses, and sanity’s sake,” Taylor says.
As Taylor says, setting up a yearlong marketing plan is a major undertaking, and it’s without a doubt, a team effort. That’s why she works closely with her brother, Brandon, operations manager at Pickering’s, to ensure the staff is able to put this plan into action, working alongside the shop’s cash flow and historical seasonality.
And it’s worked well for the shop. Taylor’s efforts and creativity as the shop’s marketing director won her a Ratchet+Wrench All-Star Award in 2017. After joining in 2014, the shop saw massive improvements, and her agendas, events and efforts played a major role in increasing car count by 25 percent, and upping annual revenue from $2.2 million to $2.9 million over the past five years.
The main key to setting a program like this up, the siblings say, is set goals for the shop, and what you want to accomplish in the following year, like a certain boost in car count, and envision how you want to make that happen while still staying in line with your company’s cash flow.
The two detail seven keys to developing an in-depth yearly marketing plan.
1. Do an end of the year analysis.
Before laying this yearly marketing plan out, which they do in December, the Pickerings say it’s vital to sit down and do an end-of the-year analysis.
In this end-of-the-year analysis, the Pickerings say you should look at where your advertising has been at in the past, and what type of ROI you received from your previous marketing efforts to see what worked and what didn’t. Often, this means going outside of QuickBooks to see what you spend in each area, like retention advertising, customer acquisition and promotion.
Then throughout the year, you need to make sure you stick to it, and pay close attention to budgeting and cash flow.
“I have probably a list of 15–20 things that I’d love to do with my ad budget … I haven’t gotten to the point where we have the cash flow available to do that,” Taylor says. “Slowly but surely we’ll implement new things into that routine. We’ll go back and evaluate it each time.”
2. Pinpoint fixed costs.
Fixed costs are going to be the things you know your shop will spend money on, and they need to be budgeted out first.
In the case of Pickering’s Auto Service, it’s the marketing salary, and benefits of the marketing director. In case of other shops, these fixed costs might be consultant fees for a marketing company.
3. List everything you expect to buy.
After you have planned out fixed costs, it’s important to list everything you plan to buy for the upcoming year. Taylor’s list includes everything that needs to be bought for advertising campaigns, promotional items, and branding items like pens or business cards. While a shop might not be able to plan out this in-depth in its first year, it’s important to at least have a rough estimate to plan out your cash flow.
This list should include the planned cost and quantity of promotional and branding items. For instance, if they need company water bottles, she lists the quantity needed, the cost per item, the total cost and averages out the cost per item.
Additionally, the Pickerings put down the estimated cost of each event, which includes promotional cost, event cost, and your estimated attendance based on info from past events.
4. Plan out your advertisements, and track ROI.
When planning out your advertisements, it’s important to focus on narrowing down your goals and what you want to achieve in the upcoming year.
In the Pickering’s plan, advertising items for each month and season, like mailers and service reminders, are mapped out with invoice dates, drop dates, quantities and total cost.
The staff at Pickering’s works together to track the ROI on these marketing efforts throughout the year, to see what’s working and improve the success of the plan from year to year.
“We’re working diligently with our service consultant team to track how customers hear about us, coupon codes for everything. We constantly try to monitor that,” Brandon says.
Brandon has his point-of-sales team, along with Kukui and Google Analytics, track where customers came in from, and how calls were converted. That way, if a specific plan or campaign doesn’t work out over the year, they can make note of it for next year’s planning.
5. Have enough cash flow on hand for busier months.
Taylor says her entire budget is based on seasonality, which took roughly 6–8 years to find out the slowest and busiest times for the shop. She says it’s vital to stick to this to make sure you have enough cash flow on hand for some of the busier months, and advertise enough to get people in the door on the slower months.
“We really looked at seasonality of revenue, which dictates what our cash flow positions are,” Brandon says. “We do the bulk of our printing in the summertime. The first quarter is usually the slowest quarter, so it’s not the time to be doing extra printing, mailers, anything like that.”
6. Make sure specials don’t coincide.
She has a specific section in her marketing expense schedule for seasonal specials, like Christmas cards, back-to-school specials, and fall winter and spring specials. Still, it’s a balancing act to make sure these seasons, events and promotions don’t coincide with each other.
Each special lasts for a specific period of time (around a month and a half or two months) and her schedule makes sure these don’t overlap.
For instance, Taylor says, if you know your shop has a big direct mail drop on first of the month, you don’t want to distribute a big coupon around the same time.
7. Keep an eye on it throughout the year.
Even if you have an in-depth, full-year plan decided, you should still keep up with your plan throughout the year. This not only allows you to stay on track, but it helps when you plan for next year’s budget.
“It’s not planning the whole year out and going on autopilot,” Taylor says. “It’s constant checking, verification, making sure you’re holding people accountable.”
Additionally, Brandon says it’s vital to keep up with your vendors and be aware of any contracts throughout the year to make sure they deliver on what they promised.