How to Determine the Perfect Marketing Budget
You might have a fantastic product or service people will love. You might even have the ability to disrupt the industry. But the truth is: without marketing, no one can know you exist. Customers today are inundated by images everywhere they turn – from billboards to FB advertisements. You should find a way to stand out.
Once you have made a commitment to the success of your marketing you should figure out how to allocate your funds. How much should go to social media? What about the promotions? Do you have employees specifically doing marketing, and what is the salary? All of those questions need to be answered and more. Here’re some tips on how to determine the perfect marketing budget:
A starting point
If the word “budget” makes you scratch your head & you do not know how to start, that is okay. Laurel Mintz recommends that new companies (1 to 5 years) invest 12-20% of their gross/projected revenue. Once you a more established company (5+ years) you can change the amount to 6 to 12%
You might be shocked at those amounts – but remember that creating a brand does not happen overnight. Especially in those beginning years, you are building your unique consumer experience & attracting loyal customers. Once you have a strong consumer base you could benefit from referrals & existing brand recognition, and decrease the budget.
Research on the specific industry could also give some insight. Best practices for a B2C company are going to vary from B2B. Any information you could find about trends in the individual market is a valuable insight.
Distributing funds properly
What worked in marketing five years ago is not what works in marketing now. So before you determine the distribution of your funds, do some research. Which categories are the smartest to invest in? For instance, digital advertisements keep on growing, and in 2017 are projected to surpass traditional TV advertising spend for the first time. Social media advertisements are an easy & inexpensive way to start off in this sphere. An active social presence itself does not even cost money – only time to post content & interact with users.
Another major category is automation. Whether it is a social media/email platform, analytics tracking that auto-populate reports, or consumer relation managers with built in follow-up options, automation saves you time. It streamlines processes & allows you to concentrate future thinking instead of being caught up in day-to-day repetitiveness.
Something that has survived the digital test of time is search engine optimization. The development of mobile may have changed the way people search – but it is a still powerful form of lead generation. Budgeting in this category can look like Google pay per click/other inside forms of SEO, or even hiring a consultant to support your current practices & improve your Google rank.
A budget does not have to be carved in stone. All the research in the world cannot tell you how your personal audiences will respond. Something that worked for someone else in your industry…might not work for you. You might find yourself redistributing funds halfway through the year. But carefully surveying your analytics & following industry best practices could point you in the true direction. A strategy for smart marketing is a strategy for success.