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Develop A Marketing Budget

Updated: Dec 26, 2019

What is the most important thing for the success of your business? The answer is always AWARENESS!

There are plenty of other factors that play into a successful business but building a successful company almost always involves successfully marketing your product, your service or yourself.

There are so many companies that underspend on their marketing efforts or overspend trying to reach a specific audience. While marketing is filled with strategies and ideas, it’s easy to get flustered by all the things you “could” be doing to help grow your business.

The best way to make sure that your money is being well spent is to develop a detailed marketing plan to follow. The marketing plan should include everything from understanding your target market and competitive position to how you intend to reach that market and stand out from your competition.

Your marketing budget is a key component of your marketing plan, it will outline the cost of how you’re going to achieve your goals within a given timeframe.

Here Are A Few Tips For Developing That Elusive Marketing Budget

Know Your Sales Funnel – Building an effective marketing budget requires a deep dive into your sales funnel, where you’ll track results throughout the revenue cycle, from prospect to customer. Getting this data from your website analytics or CRM is relatively simple:

·       How many site visits do you have per month?

·       How many leads are you generating per month?

·       How many of the leads convert to sales?

·       What’s the cost of generating these sales?

·       Are you touching prospects at each stage of the buyer’s journey? (Awareness, consideration, decision)

·       What’s the typical value/revenue of a new deal?

Know Your Operational Cost

·       How much would it cost to run your business every quarter? (Some quarters are more expensive than others)

·       How much do you profit in a quarter?

·       How much would it cost if you hired an agency or individual? (The upfront costs will be higher than doing it in-house, but the results and return on investment could justify the additional investment.)

·       What are the potential costs of your inaction? Is your rent schedule to increase? (Be sure to calculate rapid changes in the marketplace and if you can afford to reduce your market share in the face of current and future competition.)

Know Your Business Goals

·       What are your business objectives for the quarter?

·       What are your business objectives for the year? How about three years out?

·       What were the past strategies and tactics used? How effective were they?

·       Where is the industry headed?

Set Your Marketing Budget – It’s common for businesses to allocate 7-8% of their revenues to marketing, splitting that between brand development costs such as websites, blogs, sales collateral, and promotion costs, as well as campaigns, advertising, and events. Keep in mind that industry-specific marketing standards vary widely. For example, if your company is in the pharmaceutical or retail sectors normal marketing expenditures can exceed 20% of revenues. Make sure to set your budget based on your business goals.

Marketing Is an Investment Not an Expense – Marketing is the science of investing in your business and your products for the long-term. Focus on thinking of marketing as an investment, but don’t focus obsessively on early ROI. Instead, establish key-performance-indicators whereby you know the plan is on track and things are progressing the way you and your agency had planned. The money might not be flowing yet, but the investment is paying off. Keep building the plan, much the way you’d build a house. If done correctly, the sum will end up greater than the parts. Like anything in life, you simply must invest wisely.

Growth Mode. Setting your marketing budget will be influenced by whether your organization is in growth mode or planning mode. If you’re in growth mode, you’ll need to generate revenue at a faster rate, so you might consider investments in quick-win marketing techniques, like PPC.

Take an active approach to further developing your website, so your website can become a central marketing hub rather than an online brochure. Consistent development and maintenance could consume a significant part of your budget, but the rewards are well worth it.

Planning Mode. If you’re in more of a planning mode, where steady growth is more welcomed than spikes in revenue, you’ll want to consider a longer-term marketing play through earned media. This includes creating and publishing great inbound content and eventually earning new business over time.

Understand Current and Future Trends – It’s important for marketers to adopt and apply different technologies to their marketing to keep up with the pace of industry changes. If you are using email in your marketing strategy, take advantage of features such as contact insights, email tracking, and email scheduling. A marketing budget should include traditional market approaches as well as the emerging market trends. Focus on your audience, what form of communication they are likely to respond to, and what your message to them should be.

Things To Consider

BrandingBranding involves every aspect of a customer’s experience, from your logo to your website, your social media posts, staff uniforms and advertising; it even encompasses the way in which you answer the phone to how you interact with customers. Effective branding promotes recognition for your business. If your brand is consistent and easy to recognize, it helps people feel more at ease purchasing from you. People adhere to familiarity and if you’re remembered as a quality provider, you will encourage repeat business.

Social MediaAll successful businesses have grown to know their audiences very well. The benefit of social media is that, getting to know your audience is now easier than ever. With platform integrating analytics like Facebook Insights you can understand the major demographics and how your customers behave. Another huge benefit is if you use social media properly, you can make it easier for potential customers to find you.

AdvertisementUse advertising to announce interesting or helpful information to people. A product, a retailer, or a service provider may use advertising to inform the general public about the availability of their products and services. Advertising can accomplish so much more, as in providing information on how to contact the business, where to find the business, who the advertiser is, and even what the business core philosophy maybe. There are three major benefits:

  1. Announce new, interesting, or helpful information

  2. Inform of services or products

  3. Engage with customers through story-telling

Content – You cannot do without content. You need content to survive because the content is everywhere. Web design may change; SEO may change, but the content will always remain the king. Content marketing is a great way to grow your audience by using high-quality content. You can attract more people to your website and increase the number of followers you already have. Above all, you can grow your credibility for people to see you as an authority in your industry - this is only possible with creating high-quality and valuable content!

Events – Marketing at events puts you in a very unique position with your audience. It can associate your brand with concepts, other brands, and positive emotions in a way that other types of marketing simply can't achieve. Regardless of the industry, you're in, there are numerous event types that your brand can participate in. Whether it's an event you're hosting or sponsoring, or an event that you're participating in, if it makes sense for your business and your audience, it can be beneficial in the end.

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