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