Why a bottom-up approach is essential for effective marketing

Is your marketing strategy more of a guessing game than a well-thought-out plan? Many businesses struggle to set clear goals, leading to wasted resources and a lack of direction. This article highlights the necessity of a bottom-up approach for impactful marketing.

By: Fabian Ström, Digital Specialist, on October 25, 2024 | Reading time: 5 minutes

Why businesses should use a bottom-up approach

Without specific goals, how can you know if a XX% increase in online traffic is truly driving value for your business? How can you measure your success if you don’t know what you’re aiming for?

That’s why businesses should use a bottom-up approach to set their marketing goals and budget. This means starting with specific measurable goals or targets and working backward to determine the needed resources and budget to reach them.

How a bottom-up approach works

Imagine you’re a clothing retailer aiming to increase online sales. Here’s how a bottom-up approach works:

Start with your goals

Determine your desired online sales revenue for a specific period (quarterly, half-year, or full year). When setting goals, consider internal and external influences that could affect your potential revenue from each marketing channel. Do you have the right staffing to propel your email marketing initiatives, and will the ongoing inflation impact consumer spending and purchasing power?

Analyze historical performance and future initiatives

Use historical performance data and upcoming marketing initiatives to create a realistic revenue projection. When analyzing historical performance, try to understand your current baseline and identify trends, strengths, weaknesses, and opportunities for upcoming marketing optimizations.

Additionally, consider factors in upcoming marketing initiatives. Are you planning to start using TikTok as a paid channel? This can significantly impact your marketing efforts. Even business-related changes may affect your marketing outcomes. If you raise the minimum purchase amount that customers must meet to qualify for free shipping, you will likely see an increase in your average order value. However, this change might also lead to a decrease in your conversion rate, as some customers may be discouraged by the higher spending requirement.

Balance branding and conversion activities

Remember that long-term growth is difficult without strong branding. While branding activities may not directly contribute to short-term revenue, they are essential for the overall health of your business. That expensive PR event may not give you the bang for the buck today, but hopefully pay off in the future.

Invest in branding to decrease customer acquisition costs over time. This can lead to increased traffic from both organic and paid channels without increasing your budget. While branding is essential for long-term growth, paid channels focusing on low-funnel activities often play a significant role in driving short-term revenue.

Calculate your budget

Establishing a baseline for organic channel revenue using historical and benchmark data simplifies the process of determining budget requirements for paid media. If organic channels are expected to contribute a specific percentage of your conversion goal, the remaining conversions will need to be achieved through paid media.

By following a bottom-up approach and using data to inform your decisions, you can create a more effective and efficient marketing strategy. This will help you achieve your business goals and maximize your ROI.

With a bottom-up approach, companies can calculate requested resources to reach specific targets.