Marketing is something that every business has to do to grow, with successful campaigns linked to an exponential increase in profits. That’s why it’s essential to spend money on good advertising, but how do you know what strategies to fund or how much to invest? Don’t worry, we’re going to break it down here.
Marketing Budget Plan
Determine your brand and audience
The role of branding is to tell potential customers what sets your business apart from other like-minded companies and show how you relate to them. This involves knowing not just what consumers want to buy, but their values.
Figure out your unique selling point (USP) and how this benefits your target audience. Once you’ve determined your niche, branding decisions, like font, colour schemes, etc, will be much easier to decide.
The second part of this is knowing how to reach your audience. There are so many different ways to advertise now, allowing you to reach a very broad or very specific section of society, from billboards to newspapers to television to social media. Figure out where your audience is most likely to see your adverts and be receptive to them.
Many companies will choose a variety of mediums, like airing a radio ad during drivetime and boosting their social media page. This is a valid choice because you can create different ads to appeal to different sectors of the community.
Set a budget
It’s key to determine a realistic marketing budget before committing yourself to anything. You need to spend money to make money but that money has to be invested smartly.
The marketing budget sets out how much money is available to meet your goals in a set period. How much should your budget be? Well, that differs based on each company, but here’s a good way to figure it out.
Look at your sales funnel
Your customer relationship management (CRM) software can let you easily see your sales funnel from prospect to customer. Ask yourself, in the average month:
- How many visits does your website get?
- How many leads are generated?
- What percentage of these are converted into sales qualified leads (SQLs)?
- What does it cost to generate SQLs? (e.g., website development, content creation, paid advertising, time spent nurturing leads, etc.)
- How many SQLs become opportunities?
- What percentage of these become new deals?
- How much money does a new deal bring in?
Determine your business goals
Now that you know how many people are already coming to your site and how many are making it through to the buying stage, it’s time to work out what increase you’d like to see. Consider how you would like the business to grow over the next financial quarter, year, and even three years.
In addition, figure out whether your company is in growth mode, where you want to invest more money for a quicker return, or planning mode, where you want steady returns through a long-term strategy with a smaller upfront cost.
Figure out your operational costs
Now that you know where you are and where you want to be, it’s time to work out how much it will cost to do that. Here are the questions, you need to ask:
- What would it cost in staff hours to meet marketing needs?
- Can existing staff cover this or would new employees be required?
- Would it be better to hire a specialist marketing company to handle the task, as the higher upfront cost may be offset by better results?
- How much could you lose (in terms of market share and profit) by not doing anything?
Some businesses make the mistake of failing to set a marketing budget at all. Instead, they just use whatever is remaining after all other expenses are accounted for, whether or not that is reasonably enough to meet their goals. Don’t think of marketing as an unwanted expense, but rather an investment in the future of your business.
A good estimate for companies that make less than £3 million is to have a marketing budget of 8%, which will cover brand development (i.e. website updating, sales collateral) and promotion (i.e. advertising, events).
Decide on your marketing tactics
There are countless marketing tactics out there that will work for your brand; some classic and some new. Here are just some of the most successful:
- Content creation: Blogs, YouTube videos, and podcasts can all be great ways to advertise your products/services, while also offering the potential customer some useful information in your sphere. For instance, a hardware brand might create content about how to put up shelves properly, showcasing its spirit level. (Pro tip: Repurpose content across all mediums, because different people prefer reading, watching, and listening.)
- Branded merchandise: Pens, mugs, and reusable water bottles are all examples of gifts that can be customised with your company name/logo to increase brand awareness. The return on investment is substantial, so check out the promotional items available at Pens.
- Email campaigns: These are big parts of any marketing strategy as almost everyone has an email account. Gather consumers’ emails by offering a free product or discount code for newsletter signups and use this to advertise new products, sales, fresh content, and more.
- Loyalty Programmes: Not only can you use these to encourage customers to shop with you, rather than a competitor, you can also collect their data and track their spending habits.
The ones that work the best are the ones that your clientele respond to, but it’s still good to keep abreast of current and future marketing trends that can keep you up to date with your customers. Just make sure to research how these methods will work for you before rushing in.
