Financial research is designed to provide a business with insight into the financial condition of the overall market. There are a number of benefits to performing this type of research but the most powerful are risk assessment and marketing projections. That’s why accounting departments tend to work closely with marketing teams in large businesses. They have to find ways to boost efficiency of their campaigns to get the most of their investment.
Small businesses are going to find that financial research has an even larger impact on their marketing, because they are at a stage where they simply cannot afford to waste money.
5 Ways Financial Research Impact on Marketing
1. It all Begins with a Plan
A company’s marketing plan is a clear list of goals that are written down to provide a roadmap for the marketing department to use moving forward. Each step of the process must be backed by a company’s financial plan, so research plays a vital role in creating a sound marketing plan.
Marketing plans usually consist of both short term and long-term elements. A company’s size determines the type of plan they use. One thing that all companies have in common regardless of size is that sound financial research will give them the ability to formulate a successful marketing plan.
2. Financial Research Is Used to Create a Ratio Analysis
As an entrepreneur, you should always pay close attention to the relationship between costs and sales. This relationship is generally defined by a ratio. For example, if a business earns $20,000 monthly and has $10,000 in expenses, then their gross expense ratio would be 50%. This ratio can be broken down even further so that it focuses on marketing.
Rather than waiting on the actual numbers to come in (and risk falling behind), financial research provides a way to project these ratios. These projections can greatly benefit a marketing department, allowing them to estimate the potential success of a new marketing campaign.
3. Effective Marketing Leads to Growth
Small business owners want to see their company grow to the next level, but many of them are unsure of the best way to achieve that goal.
Marketing is the tool that makes growth easier but how can small businesses create an effective marketing campaign within their limited budget? The answer is by using financial research to project the potential cost ratio of product development, expansion, and eventual launch. Anticipating these ratios will help evolve your marketing plan to get the most for every penny spent. Without research, your risk factor will increase substantially.
4. Determine Whether a Marketing Campaign is Successful
Not only can financial research be used to project future ratios, but companies can use it to see what past marketing campaigns were the most successful. That way, they can replicate those campaigns to try and match their success. Marketing and accounting departments work closely together to prepare new marketing budgets, so they can use past success to prepare for future expenditures.
5. Create Enhanced Marketing Reports
The primary job of a marketing department is to create programs designed to improve sales through advertising. Their main goal is to generate the most sales while spending the least amount of money. This is done using the same ratios that we’ve discussed throughout this article.
Reporting is a huge part of effective marketing. These marketing reports can be enhanced through financial research of both past performance and future projections. The bottom line is that marketing should always be on the lookout for the most efficient ways to promote the business. This is best accomplished through effective reporting.
There has always been a direct link between a company’s finances and marketing. Financial research has a huge impact on marketing because it allows for a more in-depth look at important marketing ratios.
Author: Jacob Haney