How to Create a Marketing Budget That Considers Peaks and Seasonality

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Can you think of a product or service whose usability is tied to a season? What about a product that skyrockets in popularity after it’s promoted by a celebrity or news program?

How to Create a Marketing Budget That Considers Peaks and Seasonality

I think about this every January, when I show up at my usual time at my usual gym, only to find a stranger on every treadmill, each with an expression of hope and determination on their face. The gym is in its peak season and gets flooded with new members, most of whom will peter out by March.

These indicators are a sure mark of a business impacted by seasonality. If you’re a visual learner, look no further than Starbucks’ indexed sales, charted below from 2013 through 2016. Behold the power of the Pumpkin Spice Latte! In 2016, sales during the highest month, December, were a whopping 58% higher than in January, the lowest month.

A graph showing Starbucks

Starbucks’ indexed sales show the effect seasons have on business (Source)

Whether you’re a mom and pop shop or an industry leader, peaks and valleys throughout your fiscal year present a unique set of challenges and opportunities to your team as you build a marketing strategy and budget.

These seasonal pressures can be financial, cultural, or time-based. They influence your customers throughout the year and create waves of interest and potential sales.

With the right data collection plan, analysis tools, and marketing message, your company can gain valuable insight from these seasonal fluctuations and build a marketing budget that not only makes the most of the waves, but rides them straight to success.

Proper collection and documentation of data is the foundation of a successful marketing budget

One of the biggest challenges in building a successful, seasonal marketing budget is figuring out how to track your peak seasons.

Every data point you can keep track of—whether you’re tracking company expenses, clicks on your newest blog post, or general traffic on your website—can inform how you build your marketing budget.

If you’re just starting out, take advantage of software you probably have already. Use Excel and QuickBooks to track each expense and transaction. With enough of these data points, you’ll be able to evaluate your spending habits and identify recurring costs. These are the building blocks of your budget.

We asked George Schildge, CEO of Matrix Marketing Group, about the part data plays in planning a marketing budget with his clients:

“With the unadjusted view of my sales data, I may see an upward trend during the holiday season—but has that trend accelerated from the previous holiday season or stayed the same? You won’t know that answer until you seasonally adjust your data. I have to remove the peaks and valleys from the sequence of data points. Once that is completed, I now have sales data that does not change based on seasonality.”

The process Schildge discusses here is called seasonal adjustment. Simply put: seasonal adjustment is the year-over-year comparison of whichever data points you want to analyze.

Let’s go back to my gym as an example. If I wanted to know how this January’s increase in gym memberships compared to other years, I would compute the ratio of that month’s sales to the entire year’s sales. By doing this for January of every year and averaging the results, I would have a seasonally adjusted idea of how January typically differs from the average month.

Why is this adjustment important while you are collecting and mapping your data? I’ll let Schildge explain:

“Trends left unanalyzed can be misread and could lead to making poor decisions. Let’s say you’re selling a product and business has been down. You’re thinking about rolling out a new product until September, and you see your sales growing. You might stay with your current product offering. However, your seasonally adjusted data shows a different story.”

 KEY TAKEAWAY:  When you are collecting and analyzing your business data, be sure to adjust for year-over-year seasonality.

Use simple forecasting to make educated predictions of upcoming seasonal trends

Once you’ve done the work to collect your data, you can begin to forecast—using your company’s past data to inform future decisions.

Would you like to plan for the need to increase your labor force? Or perhaps you’d like to see the effect of your email campaign on sales inquiries? When forecasting with your data, ask questions such as, “What do I want to know about and anticipate?” and “How can I begin to remove uncertainty?”

My gym, for example, might want to use the data it’s collected over the past few years to forecast how many of its members who joined in January will be positively motivated (and increase their gym attendance) by a promotional deal in April.

Often, the best way to do this is to use business intelligence software. The right intelligence software can help you visualize trends, make predictions, and share your findings—all in a way that’s accessible and easy to understand.

“But Sam,” you say, “I don’t have the time to research business intelligence software, let alone the extra money in my budget to buy it!” Not to worry! For a review of eight of the best free and open source business intelligence software tools, click here.

As you begin exploring how forecasting can help you track and analyze the seasonal peaks and valleys of your business, remember that forecasting can get very technical very quickly.

If you’re an experienced data scientist versed in coding languages such as Python and ready to play around with machine learning algorithms, that’s great; more power to you! If that’s not you, though, do your best to avoid getting caught up in these technicalities at the beginning.

There’s a wealth of forecasting value in simple data visualization tools such as pie charts, line graphs, and geographical maps, and business intelligence software can help you understand how and when to use them.

 KEY TAKEAWAY:  When using data to forecast, start with something simple and easy to apply to your marketing schedule (such as predicting volume of blog post views based on the time of day you post).

How to begin building a marketing budget

Equipped with the skills needed to keep a careful and seasonally adjusted record of your business’s historical data points, as well as the right business intelligence software to help you map those data points and forecast trends for your upcoming year, you’re ready to begin allocating a marketing budget.

As you design your budget, be sure to set both quantitative goals (e.g., profit, number of customers, units sold, web traffic) and strategic goals, for example reaching out to a new market or rebranding your company with a focus on philanthropy or sustainability.

Each business should set its own goals and structure its marketing budget in a way that reflects its industry. That said, there are some common elements to consider including:

  • Pay-per-click (PPC) ads on search engines such as Google or Bing
  • Search engine optimization (SEO)
  • Graphics (e.g., web banners, infographics)
  • Thought-leading web content
  • Events/trade-show costs (e.g., pop-up banners, sell sheets, freebies, travel and accommodation)
  • Traditional advertisements via newspaper, radio, or TV
  • Social media tools and services (e.g., LinkedIn ads, promoted posts)

I asked Laura Simis, associate director of organic strategy at Coalmarch Productions (a marketing agency that works primarily with small businesses in the pest control and lawn care vertical), about budgeting a marketing strategy.

“We factor in our client’s revenue goals, recurring revenue and attrition of current customers, and sales closing rate to predict how many new customers they need to convert in the year in order to be profitable. We also use conversion rate, historical performance, and cost-per-click models to predict the most beneficial allocation of PPC budget across high volume months.”

 KEY TAKEAWAY:  When building your marketing budget, include the media you will use, such as social media, trade shows, or blogging, as well as the technology and resources you’ll need, such as a professional website or PPC ads.

Seasonality informs how and when you market customers

As a person working in a seasonal industry, you know as well as anyone that engaging with potential customers is easier and more successful during peak season. But a productive peak season is the end product of careful planning and marketing, both leading up to the peak season and in the months after it crests.

Slower seasons give you the time and space to audit and analyze all the data you painstakingly collected up to and through your peak season. Look for web traffic trends, spikes in sales outside of traditional peak season dates, and phrases and keywords that produce the most SEO.

“When it comes to marketing, in most cases, getting ready when the peak season hits is too late,” Simis explains. “We plan out which content will be most valuable and needs to be on the website prior to the season.”

Simis makes an excellent point here: Your slow season is a prime opportunity to prepare your B2B marketing and sales strategies.

Think of it this way: The more time and energy you spend in off season preparations and forecasting, the more sales and traffic you can anticipate in your peak season.

Casey Hill, a senior account executive for a B2B SaaS company that advises small businesses of all types (including many seasonal businesses), says that companies often fail to place enough focus on the brand or narrative of their business during the off season:

“Instead of strictly hitting people with sales-oriented or discount-oriented emails, talk about why your brand is different, how it is giving back, or why it matters. If you get people to connect with your why and get excited about what you represent, not only will those people circle back to your product, but they are far more likely to refer you as well.”

Think about the customer’s journey and meet them where they are. What kind of feeling do you want to evoke in a potential client? Whether excitement or concern, remember that ultimately, you’re trying to motivate this person to act. For a quick and effective crash course in writing B2B marketing emails, check out this Capterra article.

In addition to building a tailored narrative that sets you apart from other businesses in your vertical, your well-crafted message should span multiple marketing platforms. Distributing your campaign over a variety of mediums (e.g., email, blogging, public relations, social media accounts, websites, and newspaper ads) makes it easier for people to find and share your content.

 KEY TAKEAWAY:  A successful seasonal marketing budget will be unique to each business vertical, but there are foundational ideas that will help your marketing team begin to optimize both your fiscal budget and your time.
For continued support and thought leadership as you build, improve, and maintain your seasonal marketing budget, be sure to check back in with Capterra’s B2B marketing blog, where we keep you up to date on the latest in software, marketing, and best practices.

Looking for Budgeting software? Check out Capterra's list of the best Budgeting software solutions.

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About the Author

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Samantha Bonanno

Sam covers Buyer Marketing at Capterra, offering insights and thought leadership on marketing trends and best practices for small and midsize businesses. An Upstate New York native, Sam spends her free time backpacking with her dogs and holding snobby opinions on craft beer and single origin coffee.

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