1. Developing an Effective Marketing Budget for your Firm Presented by: Art Kuesel Allinial Global

2. Art Kuesel, President EXPERIENCE  Sales Executive  3 years inside $60M CPA firm  5 years inside $25M CPA firm  6 years at PDI/Koltin Consulting  3 years at Kuesel Consulting EXPERTISE Sales Coaching Sales/Marketing Training EXPERTISE (Cont.) Keynotes, Presentations, Workshops on Growth Growth Plan Development/Implementation Managing Partner Coaching Sales & Marketing Recruiting STREET CRED →Top 100 Most Influential Person in Public Accounting →In-house and external experience →Clients include scores of T250 Firms including a third of the T100 →Frequent writer and blogger for Accounting Today →Accomplished speaker and presenter on growth trends 2

3. Today’s Discussion 1. Benchmarks in our Industry 2. Best Practices in Developing your Budget 3. Market Size Considerations 4. Firm Size Considerations 5. Common Obstacles 3 4

4. Benchmarks

5. Average Marketing Budget by Region As a percentage of net revenues, all firm sizes considered: Southeast2.2% Great Lakes 2.6% Northeast 2.0% Great Plains 2.3% West 2.0% Source: IPA 5

6. Average Marketing Budget by Firm Size As a percentage of net revenues, all regions considered: $50M+2.2% $30-49.9M 2.4% $20-29.9M 2.6% $15-19.9M2.0% $10-14.9M2.5% $5-9.9M2.2% $3-4.9M2.0% Source: IPA 6

7. Best Practices in Developing and Implementing your Budget

8. #1 Vision, Mission, Core Principles 1. Review your vision, mission, and core principles. 2. These are the North Star for your organization and therefore give you guidance when deciding how you will allocate your resources. 3. No vision, mission, core principles? See Best Practice #2 8

9. #2 What’s in the Strategic Plan? 1. The strategic plan for your organization is like a detailed road map for the future of your firm 2. Marketing is one of the resources and departments that helps to push the organization along that path 3. Shouldn’t your marketing expenditures align closely with and support where you want to go? 4. No strategic plan? See Best Practice #3 9

10. #3 What’s in the Marketing Plan? 1. The marketing plan outlines strategic marketing priorities that have been planned because they drive or support growth, in priority order, with set objectives and goals 2. Marketing spending should mirror your marketing plan! 3. No marketing plan? See Best Practice #4 10

11. #4 Define why we would/should Spend Marketing $’s! 1. Drive new clients in the door? 2. Retain current clients? 3. Support an existing niche? 4. Launch a new niche? 5. Redesign our website? 6. Maintain our thought leadership? 7. Support our partners’ kids’ little league teams? 8. Client development? 9. Referral development? 10. What else is of strategic importance to the firm and how would a marketing budget line item support it? 11

12. #5 Who’s the Owner/Champion? An owner/Champion: 1. Guides budget development 2. Manages the budget 3. Compares budget to actual 4. Reports on ROI 5. Sign-off ability 12

13. #6 Budgeting Process 1. Identify the approving body 2. If it is “all partners” advocate for a committee with decision making ability 3. If it is only the MP gauge the value of advocating for a committee 4. Present your budget proposal by category with ROI estimates and benchmarks to your committee 5. Negotiate to approval 6. Approved budget = expected to spend, truly approved, it’s in your hands now, go make rain, you have the con, etc. 13

14. #7 Top Spending Categories 1. Client development 2. Prospect development 3. Referral development 4. Online presence 5. Thought leadership 6. Training and development (marketing) 7. Niche support 8. Events 9. Recruiting 10. Collateral/Materials 11. Advertising, Sponsorships, Public relations, Promotional Items, Trade Shows, Philanthropy….. 12. And more! See handout… 14

15. #8 The Bullseye Concept Yellow = Target Buyers Red = Influencers Blue = Business Community Black/White = General Population

16. #9 Managing Unforeseen Opportunities 1. Create a category in your budget called “unforeseen opportunities” 2. Assign this category approximately 5% of your total budget 3. Keep it handy for unforeseen opportunities! 16

17. #10 Partner Discretionary Line Item 1. Avoid the issues that arise when a partner comes to you wanting to support a personal or pet cause 2. Give all partners a discretionary amount for these purposes 3. Most firms allow $1,000-2,500 per partner 17

18. #11 ROI, ROI, ROI! 1. Be diligent in measuring the results your marketing spend is creating 2. Feel free to get creative – everything doesn’t generate a dollar ROI, but may create goodwill, and intangible results 3. Without this, you may be putting future years of budget at risk 18

19. Market Size Considerations

20.  What’s the cost of a half-page ad in the San Francisco BizTimes?  What’s the cost of a half-page ad in the Milwaukee Business Journal?  What is the cost of hosting a seminar in Los Angeles?  What is the cost of hosting a seminar in Omaha? 20

21. Market Size Considerations 1)In many cases, smaller firms will be at a disadvantage in larger markets from a spend perspective 2)Smaller firms will need to be more creative with their initiatives to fight the “big guys” 3)Smaller firms in larger markets often struggle with awareness if they try to fight fire with fire 4)But remember all firms have someone larger or smaller than them in any market (except the absolute largest and absolute smallest!) 21

22. Firm Size Considerations

23. Firm Size Considerations… Q: How much does it cost for a firm of 25 people to redesign their website? Q: How much does it cost for a firm of 75 people to redesign their website? Q: How much does it cost for a Business Journal Event sponsorship for a firm of 25? Q: How much does it cost for a Business Journal Event sponsorship for a firm of 75? For these reasons, sometimes firms at the smaller end of the spectrum are forced to spend a greater percentage of their net revenues on marketing 23

24. As Your Firm Grows… 1) So should your marketing budget (especially the part that has proven to deliver high ROI) 2) Evaluate and consider additional areas for spend as you grow that may now make sense 3) Evaluate and consider areas to drop as your firm grows and develops its service lines, sophistication, and niches 24

25. Common Challenges and Obstacles

26. 1.Inability to see marketing budget as a revenue generator and investment (but its farming not hunting) 2.Lack of strategic guidance (vision, strategic plan, etc.) 3.Relinquish of control over the current marketing “budget” 4.True authority to spend within budget 5.Unforeseen opportunities 6.Partner “specials” 7.Lack of ability to fail with any particular marketing initiative 26

27. Find Resources: kueselconsulting.com/allinialglobal

28. THANK YOU! Art Kuesel, President Kuesel Consulting, Inc. 312.208.8774 art@kueselconsulting.com www.kueselconsulting.com