Why Your Annual Marketing Plan Might Be Doomed For Failure

Okay, we all have been taught that the most effective way to manage business and marketing efforts is through an annual plan that defines objectives, strategies, budgets and schedules. Right?

Unfortunately in today’s dynamic environment, companies that are directing their marketing efforts through an annual plan may find themselves at a tremendous competitive disadvantage…here’s why:

1. This is the type of year where annual sales forecasts are extremely unpredictable. There are certain industry’s that are seeing tremendous growth spurts while others are slowly lagging. In this type of economic environment, sales forecasts are more predictable if done month-by-month versus on an annual basis.

2. Consumer trends (and even business-to-business trends) are reflecting tremendous movement. Adoption is accelerated based on consumer confidence, technological advances and financial security. Add on top of that the guaranteed demographic changes and you will see a market that is dramatically and significantly changing. With several product categories ensured pent-up demand, it’s difficult to estimate when the purchasing floodgates will be opened from an annual basis.

3. Consumer behavior and how we communicate to them is changing as rapidly as the trend lines. Two years ago who would have predicted the number of 50+ consumers subscribing to social media sites or the dramatic decrease in telephone landlines? Marketing communications is more spontaneous and interactive than ever before. A marketing plan developed six months ago might be obsolete in reaching next month’s market.

4. Marketing managers, just like consumers, are hesitant to spend marketing dollars until they have a strong confidence in return-on-investment. No one wants to be caught overspending based on sales. This tendency leads to slow investment at the beginning of the year and accelerated spending in the later part of the year. By managing marketing budgets on an annual basis, you might be under serving your market potential based on this simple fact. This not only eliminates any growth potential but hands over market share points to your competition – particularly new entries into your market.

So how do you plan to stay in pace with the dynamic market?

We suggest companies establish budget parameters on an annual basis, but create specific marketing plans on a quarterly basis. In this way, you have the ability to make critical adjustments that are driven more from immediate marketing and sales data.

The whole point is that market planning should address both short-term and long-term sales objectives. Don’t just be cost-of-sales overhead but create a market plan and environment that is as dynamic as your marketplace. Smart marketers keep pace with the market by identifying the key trends that can be taken advantage of for increased sales and market share.