On the Cheap
It’s a nagging question: How do you stretch your dollars on a tight budget — say, six figures or less?
There’s no magic formula. But you can go far with luck and creativity.
Here are 10 tips from experts on how to get the most out of your money.
- Accept your limits
Don’t go overboard, says Matthew Glass, CEO of Grand Central Marketing. Figure out what you have to work with and get rid of the frills.
“If you can’t do it, don’t do it,” Glass says.
What’s a small budget exactly? The range varies.
Some campaigns — say, a one-day sampling event — can cost under $25,000. Many promotions will top $100,000.
And companies with mass distribution can spend more than $1 million, depending on their objectives, notes Chris Donnelly, president, NMA Entertainment and Marketing.
- Find a partner
That is, get someone to share your costs.
The Crockpot Slow Cooker brand hooked up last year with ConAgra’s Hunts division. The two sent an FSI containing coupons, recipes and a $5 rebate offer on a Crockpot.
Crockpot sales doubled as a result of the $250,000 campaign, part of which was paid for by ConAgra.
“Alliances allow you to leverage another partner to make it more exciting at no additional cost or at a reduced cost,” says Donnelly, whose agency helped secure the deal.
Another benefit is that you can borrow some of the glow from your partner’s brand. Then there’s the financial incentive.
“If you can trade out to use other people’s money to add to your budget, that certainly helps,” says Tom Baer, director of promotion strategy, Launch Creative Marketing. “Sometimes it involves luck. The timing has to be right.”
But problems can arise in any relationship. Some companies may not want to share the spotlight. Partnerships are also time consuming — finding a suitable match doesn’t happen overnight.
Assemble a list of potential partners, those with like-minded objectives, and whittle it down. Don’t send a general mailing and go with the first company that says “yes.”
“It is a relationship business,” Baer says. “A lot of money wasted is from people who cut deals who don’t know what they are doing.”
- Step outside your comfort zone
Bear Naked created a new product, Heavenly Chocolate granola, in a tie-in with Universal Studios’ “Evan Almighty.” It was the company’s first movie promotion.
“Innovation gives another reason for customers to take the program,” says Bear Naked’s senior vice president for sales and marketing, Tyler Ricks. “It helps you successfully sell to retailers.”
But the idea wasn’t an easy sell. What if the movie was a flop? Some staffers worried about the impact on the campaign.
“We got a lot of push back from our brokers and internal sales people,” Ricks says. “The promotion was out of the box because it was a tactic that hasn’t been used in the natural organic space.”
He adds: “A lot of the time, marketers spend resources on things that aren’t consistent with their objectives.”
But that wasn’t the case for Bear Naked. The company sold more than 5,500 cases of Heavenly Chocolate during the 12-week campaign.
Of course, this may have been helped along by a sticker booklet containing dollars-off coupons. This was distributed with the granola packages.
The company also managed to do some good. It ran an online sweepstakes and donated $1 for every entry — up to $25,000 — for planting trees.
“You want to push as many buttons as possible to try and beat out the big guys who will be spending a lot more,” Ricks says.
The promotion cost almost $360,000, but it was money well spent. It drew more than 65,000 entries, and 15% of those consumers opted in to the company database. And the brand’s market share grew 3 points to 16% during the effort.
- Do something wacky
Napster built a burlesque club in the middle of the Digital Life electronics trade show last year. The budget: $80,000.
Grand Central Marketing transformed the 20-by-20-foot booth into a night club, complete with dancing girls and a bouncer standing guard outside the entrance.
Visitors checked out the latest Napster offerings on laptops and listened to play lists. And reps wandered the exhibit floor, letting people know they could download tunes for free.
More than 50,000 attendees visited the lounge, and more than 20,000 branded premiums were handed out. The lounge also won Napster its second Best of Digital Life award from PC Magazine.
“We didn’t let our budget limit our imagination,” says Christine Fleming, the former Napster associate director of partner marketing who oversaw the campaign. “Once we are on to something, then we pare it down and see how we can make it work on a budget.”
The promotion was the second Grand Central Marketing executed for Napster at Digital Life.
“It was harder the second time around,” Glass says. “What we do is certainly not a science, but doing things that are unexpected or looking at things differently can often save us money and provide great results.”
- Hire people you know
Want true cost savings? Hire people you’ve worked with before and build a network to tap for future use.
“It’s much easier to reach out to someone you already know,” says Andrew Strickman, Ammo Marketing’s vice president, creative, and managing director.
For one, companies can negotiate salaries and implement contracts with repeat hires, Strickman says. More than likely, they’re good workers and you can trust them to represent your brand.
If you have a good relationship, people will be ready and willing to work again, Strickman adds.
Costs can rise when companies turn to staffing agencies to fill the gap. Most will charge hourly or daily fees, and often the extra expense wasn’t considered when the budget was put together.
- Always build a cushion
Granted, this is a no-brainer. But companies often get blindsided on costs.
The rule of thumb? Allocate at least 10% of your budget for contingencies, Glass says.
“In events and production especially, where there are many vendors and suppliers, there will be unforeseen costs,” he says. “Better to have savings than to eat the hidden or last-minute costs.”
Agencies often take the hit if a campaign goes over budget. “You can’t go back for more unless additional activities or materials are requested by the client,” Glass adds.
- Prioritize
What’s your most urgent goal?
“The biggest challenge when budgets get tight is often deciding what not to do,” says Nowell Upham, executive vice president, promotional marketing for The Marketing Arm. “It’s important to prioritize promotional objectives, and be willing to try one or two things well with a promotion versus trying to do too much.”
For example, an automotive company may want to collect e-mail addresses to generate future test drives. But will this be as effective as a more expensive direct mail campaign?
Don’t try to do everything. “Pick one [objective], based on return,” Upham says.
That means looking at the prospective value of each idea.
It’s all about choices.
“It’s tough,” admits Bear Naked’s Ricks. “You always want more resources. It forces you to make the really tough decisions. You really have to prioritize your dollars against the tactics you know will work the hardest for you in accomplishing your objectives.”
- Consider non-traditional media
Want to reach lots of people without sucking your budget dry? Try alternative media.
American Airlines and MasterCard launched a sweepstakes in July tied to Universal’s “The Bourne Ultimatum.” The promotion, which cost under $500,000, offered consumers the chance to win 1 million AAdvantage bonus miles.
The airline promoted the sweeps on the wrappers of Biscoff biscuits that it distributed to passengers. It also sent e-mail blasts and did other forms of online marketing. More than 33 million people registered.
Promotions like these can “save money and break through the clutter,” says Upham, whose agency executed the campaign. “Cost constraints can be just what are needed to push marketers to find a better way.”
- Use your own assets
Some marketers can realize big savings by looking at their own resources. This includes everything from packaging to table tents and menus.
“A lot of firms forget about the asset base they already possess,” Donnelly says.
Checkers Drive-In Restaurants used its packaging to promote a sweepstakes tied to Columbia Pictures’ release of “Talladega Nights: The Ballad of Ricky Bobby” last summer.
Peel ‘n reveal game pieces with movie-themed content were fixed to large beverage cups and boxes of fries.
Each piece contained a letter. People who spelled out “Fully Loaded” had a shot at the grand prize: a Ford F-150.
Smaller prizes included a trip to Talladega Superspeedway or Richmond International Raceway.
The 10-week-long campaign drew 12,743 sweepstakes entries and $1.7 million in profit — not bad for a $244,000 budget.
And NMA Entertainment and Marketing, which handled the promotion, stretched the budget by bartering sweepstakes prizes.
This saved thousands of dollars, according to Donnelly.
“Barter is a [good way] to expand an entertainment tie-in and a non-entertainment tie-in,” he says. “There are ways to save money. There’s no question. It’s all about leverage.”
- Know your budget
Honesty is the best policy where money is concerned. Above all, set clear monetary limits for your agency.
Develop a line-item budget that shows the hard costs and labor expenses. No one wants any surprises days before a campaign kicks off.
“Clients don’t want to try and figure out they are paying more than what they should be,” Strickman says.
There are headaches with any campaign. But with careful planning, companies can get the biggest bang for their bucks — and the ROI to match.
