How do you incorporate innovation and experimentation into your marketing budget plan?

1 Set clear goals and hypotheses

Before you start experimenting, you need to define what you want to achieve and how you will measure it. What are your marketing objectives, key performance indicators (KPIs), and target audiences? What are the assumptions and questions you want to test? How will you design your experiments, collect data, and analyze outcomes? Having clear goals and hypotheses will help you prioritize your initiatives, allocate your budget, and evaluate your results.

2 Allocate a percentage of your budget for experimentation

There is no one-size-fits-all formula for how much you should spend on innovation and experimentation, but a common rule of thumb is to allocate 10% of your marketing budget for testing new ideas. This can vary depending on your industry, market, and goals, but the idea is to have a dedicated fund for experimenting with new channels, formats, messages, and offers. You can also use this fund to test variations of your existing campaigns and optimize them for better performance.

3 Use a framework to manage your experiments

To make the most of your experimentation budget, you need a framework to plan, execute, and learn from your tests. One popular framework is the Lean Startup methodology, which consists of three steps: build, measure, and learn. You build a minimum viable product (MVP) or campaign, measure its impact and feedback, and learn from the data to iterate or pivot. Another framework is the Growth Marketing Funnel, which focuses on optimizing each stage of the customer journey: awareness, acquisition, activation, retention, revenue, and referral.

4 Track and report your results

One of the benefits of innovation and experimentation is that they generate valuable insights and data that can inform your future decisions and actions. However, to leverage these insights, you need to track and report your results effectively. You need to use the right tools and metrics to capture and analyze your data, and communicate your findings and recommendations to your stakeholders. You should also document your experiments, learnings, and best practices, and share them with your team and organization.

5 Scale what works and kill what doesn't

The ultimate goal of innovation and experimentation is to find out what works and what doesn't, and act accordingly. If your experiments show positive results and meet your goals and hypotheses, you should scale them up and allocate more resources and budget to them. If your experiments show negative results or no significant impact, you should kill them and move on to the next idea. You should also be ready to adapt and adjust your experiments based on changing conditions and feedback.

6 Keep learning and experimenting

Innovation and experimentation are not one-time activities, but ongoing processes that require continuous learning and improvement. You should always be looking for new opportunities, challenges, and trends that can inspire you to test new ideas and solutions. You should also be open to feedback, criticism, and failure, and use them as learning opportunities. By incorporating innovation and experimentation into your marketing budget plan, you can enhance your marketing performance, creativity, and growth.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?