One of the toughest things to gauge when running a business is your marketing budget. If you’re like a lot of small business owners, you’re probably allocating funds on an as-needed basis. I know that when a lot of our clients launched their product or service, they tried to rely on free or low-cost methods as much as possible.
Did you ever hear the saying that you get what you pay for?
In order to raise brand awareness for your product or service in a highly competitive world where anyone can hang up a digital shingle and cut into your market share, creating an adequate marketing budget as part of your business plan is essential. However, strategizing ways to spend wisely on your marketing campaign without shortchanging your business will cut costs without cutting corners.
Using a solid marketing strategy that includes leveraging social media platforms can help reach potential customers more effectively. This approach ensures that small business owners maximize their marketing budget and achieve better results.
Tailoring Your Budget to Your Type of Business
Different types of business require different marketing strategies. Understanding what works best for your business model is crucial for effective budgeting.
Strategies to Grow Your Business
Investing wisely in marketing can significantly grow your business. Learn how to allocate funds to the most impactful areas.
Effective Social Media Marketing
Social media platforms are powerful tools for reaching potential customers. Discover strategies for effective social media marketing to boost your brand’s presence.
Aligning Your Marketing Budget with Your Business Model
Your marketing budget should align with your overall business model. Ensuring that your marketing efforts support your business goals is key to long-term success.
What Goes Into to a Marketing Budget?
One look at the average marketing budget for enterprise is likely to send you into panic mode. In times when revenues are dropping off, allocating 9% – 20% (depending on niche) more per year to marketing seems like an unnecessary risk.
I mean, you can just spend time online and generate interest for free, right? Surely you can save a little more money by designing brochures yourself and printing them up at home. Paying a web designer another $5,000 – $10,000 to build your site is an expense you can cut when there are so many DIY site builders around.
But, who’s going to maintain your site? I can tell you first-hand that, even when I first started online so many years ago, the “build it in an hour and they will come” method stretched into weeks of frustration trying to do it right. I can also attest that the end result hardly presented a professional image.
So, the first step of your budget planning process is to prioritize what you’ll actually need and getting a realistic idea of how much that will cost. You can start by researching the average marketing budget for businesses your size. Don’t forget to factor in your industry and region.
If you have a history to draw upon, you can use your previous year’s marketing costs as a baseline. Sales figures are also good basis. The general rule of thumb is to set your budget at your total projected revenue x 5 percent.
Return on your ad spend also factors in. If you’re an established company with a good reputation and consistent sales, you might be able to get away with allocating 1 percent of your revenue to market your business. However, startups and new product lines might take up to half of their total budget to generate interest and sales.
How much of the work can you actually do yourself versus hiring a marketing firm? Professional marketing may seem like a big expenditure, but professionals have more resources and expertise. You’ll get a bigger return in the end and have more time to focus on other branding activities.
When planning your budget, also consider your:
- Business goals, long- and short-term
- Intended audience
- Sales cycle
- Outside costs
- Market and competition
Once you have a good idea how much you need to work with, it’s time to strategize ways to make it work for you more efficiently.
1. When it Comes to Leads, Put Quality over Quantity
You could spend all of the money in the world trying to reach more people, but it’s an exercise in futility unless you reach the right leads. Take the time to identify your target market, really get to know them, and put your efforts into marketing to them, specifically.
2. Double-Dip Your Strategies
Rather than spreading yourself – and your resources – too thin, pair strategies that compliment each other. One of the most basic and effective examples is SEO and content creation.
3. Know Your Marketing Platforms
Not all sales channels and platforms work equally well. You could focus on Facebook ads, but that won’t be very effective if your audience isn’t hanging out on social media. Part of knowing your audience is learning which platforms are most effective for reaching out to them. Put your resources where your audience lives and breathes.
4. Drill Down on Your Business Goals
It’s not enough to say “I want to increase my sales” or “I’m going to get more web traffic”. These are two separate goals that require a different strategy. Do you want to increase sales by 2 percent? 50? 2,000 percent? How are you going to increase traffic, and how will you know that number has improved?
Each type of goal requires a different approach. Create specific goals that are measurable and draft a plan that’s compatible with your vision.
5. Experiment and Test
You don’t need to jump on a band wagon just to get in on the latest trend if it isn’t amenable to your marketing goals. However, you should be willing to think outside the box and experiment a little. Stay flexible, try new platforms and techniques, test their effectiveness, and put more money toward those that look promising.
6. Cut Out the Dead Wood
While you’re putting time and effort where it’ll do the most good, you should also be ditching the things that are drawing resources without much ROI. Keep in mind that some strategies, like raising brand awareness, developing a social media following, and SEO, take time to see results.
7. Recycle and Repurpose Whenever Possible
There’s no need to create a new headline or content for every launch. Things like social media updates and email can be updated regularly. But, you can transfer other marketing materials from one medium to another, such as creating a video from a tagline, or regenerate interest in an older blog post by linking it to something current.
8. Take Advantage of Free Advertising
Yes, I said what I said at the beginning of this post, But, free advertising is still a good way to generate buzz. You just shouldn’t count on it as the basis for all of your marketing. Social proof and brand ambassadors are very effective for building trust and spreading awareness. Leverage the power of user-generated content by requesting reviews, testimonials, and images or video of your customers enjoying your brand.
9. Invest in Tech and Use it Wisely
Even if you don’t run an online business, technology is still a necessary investment that will pay for itself in due time. You just need to invest it strategically. Rather than paying for licensing, infrastructure, and platforms out right, use SaaS (Software as a Service) and PaaS (Platform as a Service) whenever possible. A customer relationship management app will help you track and streamline service.
10. Spend Wisely
I realize this point was the point, but it can’t be overstated. Don’t spend on bells and whistles you don’t need when basic will do. Take the DIY route when feasible and preferable, but don’t be afraid to invest in professionals.
Final Thoughts
It’s not enough to set aside money for marketing. In these uncertain times, it’s most important to allocate wisely and try to increase your ROI. You don’t need to cut corners.
The above tips are designed to provide you with actionable ideas to make your ad spend work harder with less effort. Using these strategies, you can effectively promote your business and reach potential customers. Whether it’s through social media marketing, building an email list, or gathering contact information, each method can help inform decision-making and optimize your marketing efforts.
Marketing pros from Level343 will work with you to create effective strategies that will extend your marketing budget and still get results. Contact us today to learn how we can help you promote your business and achieve your marketing goals.
