If I categorized all of the questions that I receive, I would have to say that the majority are concerning how much to budget and spend on marketing. I understand the popularity because this can be a tricky question.
A vital component when it comes to marketing for new companies is testing marketing vehicles to see which performs and provides the best return on investment. The majority of mature companies or businesses that have been in business for a considerable amount of time can look at data and know which vehicles work for them; if they don’t they are in trouble.
My recommendations are that companies invest 20% of their resources into marketing. This is 20% of your marketing budget as well as your time. You should continually reinvest 20% into marketing on an ongoing basis. As time goes on you may be able to decrease your time spent in marketing, but in return monetary resources may need to increase. The key is to find the vehicles that work best for your target market. Is it digital, newspaper, audio commercials, television commercials, etc.?
You will find that some people suggest as your business grows to decrease your amount in marketing. I firmly disagree with this tactic. You should always be marketing to new potential customers as well as marketing to the repeat consumer.
Spending Budget Wisely
It’s important to spend your marketing budget wisely. Follow these guidelines:
- Know how much you have to spend.
- Have a strategy on how to spend it and what you want to achieve.
Businesses that are successful when it comes to having a workable marketing budget is that they understand the importance of being fluid and flexible. There will be times that a campaign is working really well and you want to push more money to that specific tactic or channel.
You might also encounter an unplanned campaign or event that you need to spend marketing dollars on. Be flexible, but always know whether your marketing budget is working and achieving the marketing goals that you have set – if not shift!
Reviewing Marketing Mix
Review your marketing mix. There’s no such thing as one specific activity but rather a cross-section of marketing strategies will bring the success you need. It’s the small things that add up when putting things together. Determine what marketing works by asking your customers and disregard any marketing vehicles that are not working for you and reinvest in those that do.
When Determining Marketing Budget
There is no fast and hard rule, every business is different. Marketing ultimately depends on how fast and how big you want to grow your business. It does not matter how big or small your business is, without a marketing budget you will only get so far, after that you will start to stall when it comes to business growth. Having a business growth plan is vital. Using metrics to determine your marketing effectiveness will help in serving as a guide when it comes to how much to spend and where to spend it.