Seasonality in marketing means that there’s a fluctuation between high-growth and low-growth periods for every business.
There are times of the year when customers line up to buy your product… And there are months when it feels like the whole world has forgotten about you…
Once you’ve been through a couple of annual marketing strategy plannings, you’ll begin to notice a pattern: these fluctuations are happening every single year.
For example, when doing the global quarterly marketing budgets at Bolt, I realized that it didn’t make sense to invest the same amount of budget (let’s say 100% / 12 months = 8.3%) every single month throughout the year.
To make matters even more complicated, Bolt was operating in 25+ countries and hundreds of cities. The seasonality that, in the case of ride-hailing, depends on the weather and consumer patterns, was not the same across different markets.
The high season in the UK v.s. South Africa v.s. Australia meant very different things – and very different months of the year. And yet – not all marketing leads of international brands think in terms of local seasonality.
Perhaps it was the need to plan 25+ markets’ budgets in a few weeks’s time that led us (not just me, there was a whole team of smart growth people and data analysts behind the project) to look into ways to structure and automate our seasonal marketing planning.
While seasonality is different in every industry, the strategic tactics are still more or less universal. And that’s exactly what this guide will be about: understanding the basics of seasonal thinking and applying it in your own marketing strategy, on top of being aware of the latest marketing trends.
P.S. Seasonality does not only affect your marketing results. It should be a fundamental consideration for the entire high-level business strategy, including product and growth. And this makes the approach relevant also for the CEOs and other people with fancy C-letter job titles.
Feel free to follow along the step-by-step flow of the guide or jump to any section that interests you most.
- The principles of seasonal marketing planning
- Understanding the seasonality in your business
- Building the toolset and structure for seasonal strategy
- Implementing the marketing strategy in sync with seasonality
- Revising the marketing strategy as the market changes
So, so, so… Let’s go.
1. The principles of seasonal marketing planning
The first rule of Seasonal Planning is: you do have to talk about it before the season begins.
The right time to plan the next year’s and next quarters’ business strategy and marketing budgets is not at the end of January (as it happens to be in 95% of companies). This should be done in November-December of the previous year. At least a few weeks before the next quarter begins.
Because… What if your highest-ROI period for marketing is right at the beginning of January? What if this is the best possible time to invest in low-cost advertising while the competition is still recovering for a Q4 holiday period “hangover?”
Or even if the best time to launch a large-scale marketing campaign is at the beginning of March, you will have to start talking to the agencies and ad real estate vendors already a few months ahead in time to get the best possible deals + have top-quality creatives ready in time.
The second rule of seasonal planning: not all months are created equal.
I can’t really think of a business that would benefit from the exact same level of consumer interest throughout the year. If you look at the chart by Statista – on online retail sales value in the UK – you see that there’s always a drop in Q1 and a huge spike in Q4.
It’s common knowledge (I suppose?) that e-commerce brands have the highest number of sales in Q3, during the period leading up to Christmas. There are the shopping holidays like Black Friday and other made-up consumer fêtes.
So if you’re not in e-commerce, it might be a smart thing for you to not invest in paid ads during this high-competition period.
But what if the super competitive Q3 period is also when your business is growing the most?
While during Black Friday Meta ads cost might go up, the data by Nest Digital indicated that also the ROAS (return on ad spend) of Meta ads was higher. So, in the end, it was worth for some advertisers to pay (say 20%) more per 1,000 ad views because there was also a (say 45%) higher buyer interest.
So what are you to make of this?
Should you invest more marketing budget during high-competition periods of the year (especially Q3) when the cost of advertising is higher?
If this is the time of the year when the customers’ interest in your product is high then yes, you should.
However, and this is important (!): you should not invest the same amount of budget throughout the 3-month high-growth period. You should allocate most of your budget to be spent at the beginning of that period.
As you make a big marketing investment (say running a large-scale brand marketing campaign) at the beginning of a high-growth period, you will have a heightened customer interest throughout that period. Meaning more purchases and a higher total revenue.
If you invest an equal budget during all three months of the high season, you will lose out on the momentum that a higher initial investment would have brought. By the time the last month’s investment should begin to deliver results and turn into conversions, the customer interest has already waned.
The third rule of seasonal planning: turn up the confidence level
I’ve made this mistake myself, and I’ve seen other marketers do it: when doing seasonality-based marketing planning, the difference in marketing spend between months is often minimal.
But hey, the worst case scenario is this (done by way too many companies):
I suppose you see what is wrong with the chart… Each of these months you would spend the same amount of money. But during some months, the investment would bring you a 200% + ROAS and in other months, you’d have a negative return on ad spend.
If you’d stop reading the article here, you’d probably go back to your marketing budget plans and do something like this: a hesitant reshuffling of the budgets between months.
But no, this is still not what you need. Even now, you will spend way too little during months with 200% + ROAS and way too much during periods of low customer interest.
What you want to achieve with seasonal marketing planning and budgeting is something at least as bold as this:
The above chart doesn’t reflect any actual businesses’ marketing budgets. But what it does reflect is the biannual marketing spend boost that far-sighted brands do at the beginning of every high season. (Yes, there are usually 2 high seasons for businesses per year. But it can vary.)
How to create an annual marketing budget that, taking into consideration the seasonality in your business, allocates the most optional percentage of budget to each month?
Mostly, by doing two things:
- Understanding the seasonality in your business through your data, competitive research, and common sense
- Creating a planning structure and toolset that helps you to create the optional budget allocation throughout the year
And then you can just lay back and enjoy the rest of the year. Nope, just kidding! That’s when the implementation of the campaigns begins. (We’ll cover that, too.)
2. How to map the seasonality for your marketing strategy?
The most efficient way to understand seasonality in your business is to use the help of data analysts. (Not kidding this time.)
But in case you do not have an army of analysts backing you up, there are things you can do on your own. Such as…
1. Look at the month-on-month new user growth of the previous years.
This is what I do most often with the companies I’m working with. You simply ask the CEO or whoever’s in charge of the company’s growth numbers to show you the report with monthly results.
You can look at numbers like:
- New revenue per month
- New trial signups per month and cost-per-signup
- Total number of purchases per month
When looking at these numbers, take into account the external factors (e.g. covid outbreak or economic slowdown) as well as the bigger marketing campaigns and product launches that might have affected these numbers. Try to get an accurate picture of high-growth months.
2. Talk to your team
Often, the Sales team has a good overview of time periods when the customers have a heightened interest in your company’s product/service.
Also, you can check in with the CEO or various regional team leads that have a better understanding of the seasonality in various markets. Perhaps they even already have a month-on-month report (or next year’s business budget) at hand and they can share it with you.
3. Create a spreadsheet, understand the seasonality
What you’ll need is a spreadsheet that helps you understand which months are the biggest drivers of business growth.
In the example below (dummy data), I chose the New Revenue/MRR metric to calculate the percentage of each month’s growth of the total annual growth.
Alternatively, you could use metrics like New Sales/Purchases/Subscriptions or the number of New Customers as indicators.
Now, if you would use these percentages to allocate your annual marketing budget, you’d already make a significant improvement to the ROAS. However…
You can take a step further and identify the two high-growth periods, not just months. For example, in the above report, you can see that there are two spikes: a smaller one in late spring and another in the autumn.
By allocating more marketing budget to the beginning of both these periods, you’ll get a higher return on investment as the tailwind will deliver more sales in the weeks following a big investment (e.g. a large-scale ad campaign) boost as well.
The sooner you get your marketing engine working at high speed, the longer you can reap the benefits before the high season ends with (a lump of snow).
Don’t make the marketing mistake of throttling your spend when you should be investing.
Now that you’re aware of the seasonal drops and spikes in your business growth, let’s see how you can apply this know-how and make informed strategic decisions.
3. Building the toolset and structure for seasonal strategy
Almost all marketing planning, implementation, and reporting – if you ask me – happens in Google Docs and Sheets.
So let’s use our Google Sheet to develop a seasonal marketing planning tool.
Step 1: Enter the annual marketing budget for the next year that you’re planning to spend.
No worries if you do not yet know the exact budget. Make a guess. The way we will built the sheet will automatically adapt to the total budget changes.
Step 2: Decide the % you want to spend each month.
Considering that the total amount you can spend in 100%, allocate a % of this to each month.
- Aim to spend more at the beginning of the high season
- Don’t be afraid of spending very little during the low-performance months
I personally like to add an extra row that tells me how much in % I have left to allocate – it makes it easier to play around with different scenarios.
Take some time to play around with the budget scenarios. As I did the exercise myself, I first allocated a high budget % to the two months when I’d like to invest in a big marketing campaign (or simply increased digital ad spend).
As a result, I broke the total 100% and went down to -36% when adding percentages under other months. I revised and cut down the low-gowth months’ budgets further, as well as cut the budget of the higher marketing investment in March.
Now that you’ve got the percentages, calculate the actual €€€ budgets.
Note that this approach with spreadsheet formulas is highly flexible: if you want to re-adjust your budgets later during the year, you can do it in a few keyboard taps instead of redoing the entire chart.
Et voilà, your 2024 marketing budgets are done.
Well… Of course your budgets are not done-done. Now, you will have to allocate the budgets further between the marketing channels.
Note how in the high-spend months, you will have to adjust the regular marketing channels’ budget % to a lower percentage to keep the budgets on reasonable levels.
Ok. Now you actually do have the annual marketing budgets more or less ready. Time to share these with the management as well as regional teams and confirm if they also think your numbers make sense.
Expect a few rounds of changes, and be adaptive to others’ feedback.
4. Implementing the marketing strategy in sync with seasonality
I’ll keep the last two sections of this guide brief. However, I’d like to share a couple of suggestions that might help you to plan, spend, and grow better.
1. Communicate the quarterly marketing budgets to your team and start preparing early.
2. If you’re planning a big marketing campaign boost during some months, start working on the ideas as well as purchasing the ad placements (offline ads, TV, etc.) early on, ideally 3 months before the campaign launch.
3. Bring the seasonality into your marketing channel selection and messaging, too. Make sure your marketing offers and promotions reflect the season and the customers’ expectations.
Point 3 in other words: people only want to drink the Pumpkin Spice Latte in wintertime.
4. If you run a large-scale marketing campaign at the beginning of a high season, make your ads match the message for the rest of the season. (People will recognise your ads and are more likely to react on them.)
5. Don’t be afraid to start winding down on your paid marketing spend towards the end of the high season. Focus on lifecycle marketing to your newly-acquired customers.
5. Revising the marketing strategy as the market changes
Last but not least, it’s important to be flexible about your annual and quarterly marketing budgets.
More often than not, something will happen that you do not have the agency or power to control. Like the covid outbreak, like wars… But also the trends that you could not foresee.
Be ready to change your marketing strategy at any time. Having a budgeting sheet with automated formulas helps. A lot.
Towards the end of each quarter, check in with the management, the Product team(s), and the regional teams to see what they’ve planned for the next months. And discuss how marketing can support their goals.
Because, after all, marketing needs to reflect the company’s overall goals, not vice versa.
Good luck with your 2024 planning!
K.
P.S. If you liked the article and aren’t yet subscribed to my weekly Marketing Things newsletter… It’s about time to sign up here.
