What we recommend instead is for a business owner to examine their business goals by asking themselves these questions:
- What do you want to achieve?
- How much revenue do you need to generate?
- What does that equate to in sales?
- How many leads do you need?
Asking the right questions is the key to knowing how much you should set aside for marketing. In addition, these questions will give you a clearer picture of what you need to invest in generating those leads and sales.
You might not get it right the first time. What’s important, however, is that you invest in marketing on some level. We tell our clients, money is only one component. The majority of effective marketing is not just throwing money at advertising. It should be investing in skills and resources to make sure you’re doing the right activity and resourcing it, so you’re being consistent.
What is a Marketing Budget?
A marketing budget is basically a financial plan that allocates a certain amount of resources to marketing. It can be designed to span a short amount of time, like monthly or quarterly, or be a plan for a year’s worth of marketing efforts. It can include expenses such as paid advertising, sponsored web content, new marketing staff, a registered blog domain, marketing automation software, website redesign, and so on.
Ways to maximise your marketing budget
There are a few things you can do to ensure every dollar counts and minimise unexpected spending.
- Align your budget with your marketing goals. Again, be clear with what you are trying to accomplish. These can range from broad goals such as raising brand awareness to specific goals like increasing website traffic. Here are few other goals you might want to include:
- Changing your branding so that it reflects your current direction
- Improving conversion rates
- Driving more click-throughs on paid ads
- Gaining more social media followers/get more social media engagement
- Growing an email list
- Getting more people to attend your events
The list goes on. The key is to know what purpose this budget will serve and spend it wisely.
- Avoid hidden or unexpected marketing costs. Forking over cash that you didn’t plan on spending can cause frustration, especially if you have a limited budget. Of course, we can’t say these things are totally avoidable because sometimes situations change in the middle of an activity or campaign. But there are things you can do to minimise the chance this could happen to you by ensuring you know what each marketing goal entails.
For example, when launching a product or service, you’d probably be only thinking of allocating a budget for product launches and promotional activities. Then be surprised later that product marketing also requires you to set aside money for research and message testing before actually launching. These two steps are crucial to shaping the message you want to send to your customers and having a successful launch, and you certainly don’t want to skip them.
Another way of minimising additional marketing costs is having a budget spreadsheet where you can see everything. This way, you’ll see where your money went and avoid overspending.
- Remember where your priorities lie. It’s easy to be distracted when you’re doing marketing. After all, marketing is overflowing with add-ons and extras, upsells, and “premium” versions. Most of these are tempting to try. But you need to organise all your expenses so you only spend on what’s necessary.
- Actually set a budget. Don’t wing it. “Whatever it takes” is a dangerous mind set. Set an amount for each activity or campaign and measure, measure, measure! Otherwise, you’ll end up wasting money on strategies that aren’t working for you.
If the money you spend on one activity or campaign gives you more in return, you may want to increase the budget in the next year. If your money went nowhere, you should examine your budget.
- Learn about smarter marketing. Whether you’re doing it in-house or getting it outsourced, don’t go blindly into marketing. Read as much as you can about it. Invest in some e-guides or books on specific marketing principles and tactics. We strongly encourage you to attend a one-on-one, ½ day workshop or get some marketing coaching to develop your marketing plan, core messages and get the support you need to put the plan in place.
Always keep in mind that investing in marketing is essential in good times and in bad. Building a strong brand when times are good will help you when times are tough!
You may download for FREE our e-guide on how much you should spend on marketing from our website. It’s full of helpful information you can use in planning for your budget. We also explained what you can expect from your spend whether it’s less than $2,000 or as high as $100,000.
If you want to have a one-on-one workshop to better prepare you and your staff with your marketing plan and budgeting, here’s our package suggestion.
Get the most out of your marketing. We can help you grow your business.
Contact us today to learn more.