Building a successful business almost always involves successfully marketing a product or service.
The best way to make sure that your marketing pot is being well spent is to develop a comprehensive strategy and develop a solid plan.
A plan should include everything from understanding your target market and your position, to how you intend to reach that market.
Here are some tips to help you to establish how much money to allocate to this business spend. The process begins with some questions:
1. Do you understand your sales pipeline, from visits to prospects and those who convert?
2. What are your operational costs? Within that, how much would it cost to outsource your marketing?
The upfront costs may be higher, but the results and return on investment could well justify the additional expenditure.
3. What are your business goals? These are often quarterly or yearly objectives.
It’s common for SMEs with revenues of less than £5M to allocate 8% of their revenues to marketing. This is then split between brand development costs such as websites, blogs, sales collateral, and promotion costs, as well advertising, and events.
Never base your marketing budget on what is left over after covering all other expenses.
4. Are you positioning ‘marketing’ as an investment and not a cost?
Marketing budgets should be treated as something that will bring a quantifiable and ascertainable return on investment over time.
5. Is your organisation in growth or planning mode?
a) Growth mode generates top-line revenue at a faster rate, so deeper investments in more ‘quick-win’ marketing e.g. developing a company website.
b) Planning mode is where steady growth is welcomed over spikes in revenue. Consider a longer-term marketing action through earned media, e.g. generating and publishing great content and acquiring new business over time.
6. Do you understand current and future marketing trends? An understanding will help to navigate more accurate budgeting.
Conclusion: When setting a marketing budget, it is essential for a marketer to apply different technologies to their plan. A marketing budget should include traditional approaches as well as emerging digital trends to keep up with the pace of industry changes. Focus on your audience, what form of communication they are likely to respond to, and what your message to them should be.
Setting and agreeing on marketing budgets against appropriate actions can be both daunting and difficult to get right. If you need help with your marketing strategy or are looking for some consultancy to take to your senior management teams, please get in touch – firstname.lastname@example.org.