Determining the right budget for marketing your business all starts with a fundamental question. Do you view marketing as an expense or an investment? An expense is a line item on your balance sheet. Something you will probably look at with angst, and look for a way to reduce. An investment is an action and effort to realize gains. One is aligned with anxiety and the other with hope. I hope, (see what I did there?) you see your marketing budget as an investment. An investment in you, your employees, and the future of your business.
Now that we have the right perspective, let’s get started. When you are thinking about your marketing budget, it is important to keep in mind all of the potential touchpoints a customer has with your brand. These touchpoints could be online or offline and include but are not limited to:
Marketing has become very fragmented, with so many choices for the consumer to engage with. It is important to be where your target market “lives” and to be consistent with your message across all channels.
Now that we have considered some of the potential touchpoints, let’s look at some other key factors.
What are your goals?
Who is your target market?
What is your competition doing?
And, what is unique about your industry, product, or services?
All of these factors play a role in how much you should spend on marketing. As a general rule of thumb, the more established your company is, the lower percentage of revenue you need to spend on marketing (between 5-12%). Startups and early-stage companies should spend a higher percentage of gross revenue on marketing. The same can be said when introducing a new product or service line.
Once you have a good understanding of your goals, target market, and competition, you can start to develop a budget. Begin with estimating the cost of each marketing activity. These costs can include:
– Collateral (e.g., brochures, website)
A marketing budget should also include an allocation for research, whether it’s customer surveys, focus groups, or market analysis. Other considerations in developing a budget include:
– Sales goals
– Overall company objectives
– Economic conditions
As you can see, there are many factors to consider when developing a marketing budget. The most important thing is to be always ready to evaluate, adjusting for peak seasons, competition, and the appetite of the marketplace.
What are some other factors you take into account when developing a marketing budget? Connect with us and let’s discuss.
Determining the right budget for marketing can seem like a daunting task, but it doesn’t have to be. There are many factors to consider when allocating funds for marketing, let our professional marketing consultants help you plan and reach those gains.
The AD Leaf Marketing Firm Can Help!
Are you a business owner in Melbourne or anywhere else in the country? Do you want to take your marketing to the next level? Talk to one of our experts here at The AD Leaf Marketing Firm LLC.! To schedule a free consultation with our marketing teams, call us today at 321-255-0900.