Keys to a Successful Marketing Budget
Without a dedicated marketing team, budgeting can seem like a tedious task. But every company needs one to succeed. Why?
Every dollar you spend separating your business from the competition can result in five to ten thousand dollars in revenue.
This is how important a marketing budget can be, but most businesses are left marketing on the sly because budgeting can be tricky.
What’s the Challenge?
It is often difficult to find the time and resources needed to create a marketing budget, particularly for small- to medium-sized businesses. Budgeting is not just about choosing a dollar amount and creating marketing pieces. Budgeting must also account for personnel, research, and tracking.
Before You Begin
Although it may seem like your instinct, marketing budgets shouldn’t be based on how much money you can spend. You must first identify your target audience and research who could benefit most from your product or services. Define who they are, what they do for entertainment, where they find information, and what value they have. Next, ask yourself: “What is it about the brand that will make us stand out from the rest?”
You can now see your target audience clearly and identify your unique selling points. This will help you to determine the best marketing channels to communicate these differences with your customers. If you are marketing a professional service, LinkedIn or an effective SEM strategy might be a good option. Facebook and remarketing might be options if you want to sell a product or service to millennials.
Set your goals
Be realistic and set goals to track your progress. Can you really reach $5 million in sales if your target audience is small? If the industry average conversion rate is 10%, can you really convert 50% of your leads? It’s not to say that your goals should be challenging, but they should be achievable for your employees’ morale, your sanity, and your bottom line. This is your chance to define success.
It is not enough to have goals. It is not enough to have plans. You need tools and a process that tracks your progress and makes changes. Facebook offers HTML pixels that allow you to attribute website conversions back to a particular Facebook ad. You can identify campaign-related traffic and leads by placing landing pages or unique URLs on your website. Promo codes or QR codes can help you track the success of your promotional offers. It is important to remember that you cannot measure the success of promotional offers.
How much do you have to spend?
Your marketing budget should not exceed 10% of your gross revenues. This number can rise to 40% if you have a smaller business and less brand awareness. This number could drop to 5% if you’re a well-known brand. Whatever the reason, your marketing budget must be designed to achieve the goals you have set and focused on reaching your target audience via the channels your research.
The digital age has made marketing more affordable for businesses. A Facebook advertisement can reach as many people as a newspaper ad but at a fraction of the price. YouTube videos can drive website traffic more effectively than any television or radio ad, and an optimized website for e-commerce can sell products quicker than most high-traffic storefronts.
Digital and social media marketing depends on your understanding of your target audiences. Your marketing efforts will be ignored if your research on your target audience is not accurate.
The bottom line
Building your marketing budget begins before you budget. Planning and research are critical to a successful marketing campaign.