A Direct Marketing Agency - Helping Brands Acquire and Retain Customers

Now that you've got your database built and are routinely capturing customer data, it's time to leverage the database with a one-to-one marketing program. But what should the budget be and how should the dollars be spent? That's the $64,000 question. Answer: It should be based on what you want to accomplish with the program.

If your goal is to reach and gain new customers, then your focus should be on effective acquisition tactics and finding new customers most like your best existing customers. Here is an example of taking your marketing dollars and budgeting for the appropriate acquisition tactics:

On the other hand, if your goal is to better leverage your current customer and incent them to purchase more/more often, budget allocation might look something like this:

As you can see, some of the same tactics are used in both scenarios, but they are used in very different ways. The key is to determine your primary goals for the year, then build the budget according to a projected return on investment, by tactic. Then, of course, track performance and be willing to adjust the marketing dollars as necessary based on successes (and failures). Don't set the budget in stone at the beginning of the year – allow for testing and rollout to make the most out of your marketing investment.