Exercise your marketing muscle

Julie Gorham



Despite popular opinion, a marketing budget is considered an operating expense. The most successful companies decide on a percentage of sales to appropriate to marketing. Industry associations can generally identify the percentage of total sales that is appropriated to marketing. Furniture, for instance, is seven to ten percent of gross sales. Why? It’s a retail category that is considered highly consumable. The science isn’t perfect due to the scale of economy, but this is how baseline figures are established. This constraint determines how many products deep your investment will spread.


If you operate a service-based establishment, understand your business reach. Dentists have an effective service area of five miles surrounding their business. Established businesses are smart to assess their annual sales by zip code. How far are your customers travelling? Are there areas that should be performing well but report low numbers? Target your message effectively. These types of businesses are perfect candidates for direct mail and products that have defined geographic reach.

If the same business offers specialized products or services to attract customers with unique problems or needs, reaching a “thin” market may require mass reach and should be promoted as a unique service. Decide what percentage of sales this service represents and calculate a percentage of the budget for exclusive promotion. Over time, specialization creates a great referral source that knows little geographic bounds. Companies with large profit margins, or new and unique businesses, are the best candidate for mass reach. Geographic constraints applied appropriately will prevent overspending and maximize frequency of messaging.


If you sell only one type of product or service, it’s much easier to promote than multiple offerings to diverse markets. How do you reach all of these markets effectively with diverse media habits? A small, local grocer with specialty items, for example, may have four markets:

1. The locals who live within a few miles who need the basic essentials,

2. Business folks who work in the area,

3. Mature, responsible consumers who live outside of the area and buy based on values,

4. Young adults, willing to spend more on quality products they enjoy, who consume less.

Look first within your sales and goals before you look outward toward promotion. Identify sales by product and then determine the revenue it should be generating. The results will determine your promotional messaging and target audiences.

Competitive advantages

A simple spreadsheet and a little time at the computer to compare what your competitors are not saying may be quite telling. Have you asked your employees how they see your business? They are your greatest customers. Words like quality and service are overused – get granular and define the differences in quality and service. Dig deeper and the best answers will emerge.

Media comparisons

Once you have exercised your marketing muscle and performed all of the aforementioned steps, compare all of the prospective media products side-by-side, on a cost per thousand basis.


Julie Gorham is the owner of Marketing EQ, a Vancouver-based marketing firm. She can be reached at julie@marketingeq.com or by visiting www.marketingeq.com.

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