How much should I spend on marketing? If you’re asking this question, you’re not alone. Every business does at some point and, if not, perhaps they should.
You are probably cautious about investing new capital into your home unless you know it will provide an equity return in the future. Similarly, you may hesitate to hire new employees unless you are confident you can measure their success in the months to come.
In many aspects of our personal and professional lives, we think in a ’cause and effect’ way, essentially, taking a ‘return on investment (ROI) approach.’ It makes good financial sense to do so.
Just like with these investments, your marketing, business development (BD), and customer relationship management (CRM) investments should follow the same ROI-driven logic.
Key questions for professional services firms
Setting BD, CRM and marketing budgets is a feature for almost all professional services firms. Most that I know are asking questions 1 and 2, or versions thereof:
- “Did we get return on our marketing investment for the year just gone?”
- “What plans/activities will we add, do more of, less of or drop this coming year?”
Not all are asking themselves questions 3 and 4:
- “Is what we spend as a business adding value to the intended audience(s)?”
- “And how do we know?”
Questions 3 and 4 compel us to consider whether there is measurability built into our plans and activities, so we know that our investment is providing return. Are we relying on anecdote, conjecture and gut feel or are we taking a measured ROI approach to working out how much should you spend on marketing? Or put in more client-centric language: Is what we spend our budgets on of value to the intended audience(s) i.e. our current clients and/or our prospective clients? What are the big ticket items in your budget for marketing, BD and CRM plans and activities and is it money well spent?
Evaluating marketing, BD, and CRM investments
I see a number of firms who spend large on hospitality, client functions, sponsorships, lunches, entertainment etc. Do you know what you get from doing this food, beverage and conviviality? Or phrased in that more client-centric way….do you have data that enables you to know what value your clients get from these things?
More than just ROI, consider the value delivered to clients and prospects through your marketing, BD and CRM spend.
A senior leader in your firm saying “my client said it was a good night” doesn’t count by the way! At Beaton we’re in the business of measuring the effectiveness of BD, CRM and marketing activities in professional services. We ask your clients “of the activities your firm undertakes, how useful are they?”
Key insights from our research
The importance of measuring the value your clients derive from your marketing, BD and CRM activities is critical. If you do not have such measurements, here are three insights from our research across professional services that may help.
1. Client focussed CRM activities work best
“Acting on feedback” and “Resolving client problmes” are the two most useful CRM activities in the client’s eyes. These activities offer real value, far more than lunches, rugby matches and bowling nights!
“Acting on feedback” and “Resolving client problems” are the two most useful CRM activities in the clients’ eyes.
2. Personalised content matters
Our research found that clients rated “communications on subjects of interest” and “customised presentations” as their preference over websites or social media activity. Communications need to be timely, relevant, and tailored though, not just generic broadcast emails sent from a CRM system.
Personalisation matters as it ensures communications are relevant to the clients’ world.
3. Budget allocation should reflect client priorities.
If your firm spends more on entertainment than gathering and responding to client feedback, it may be time to reassess your approach.
Not to suggest there is not a place for such activities, but the key message is firms need to consider how your budget is allocated when it comes to what you spend on CRM activities.
As competitors ramp up their spend on marketing, BD and CRM investments, what are you doing to ensure yours is more effective?
Adapting to a changing landscape
Clients have seen an increase in the majority of marketing, BD and CRM activities by firms. Two considerations, therefore:
If you’re maintaining the same strategies as before, you risk falling behind.
If your investments don’t focus on what clients truly value, you may be lost in the noise.
A strategic, ROI-driven approach to BD, CRM, and marketing ensures your investment isn’t just spending—it’s adding measurable value for both your firm and your clients.
