Your Business NEEDS a Marketing Budget: NOW!
As #DigitalMarketers, we are always asked “How much does marketing ‘cost’, and what is my expected ROI?”. Very rarely, if ever, are we told, “This is my budget. How should I best invest it for max ROI?”. The truth is, most business owners don’t have a marketing budget to help them successfully grow their business.
Most businesses look at marketing as a cost, and believe that spending less on marketing equals more savings. This approach is incorrect. Marketing is an investment in your business. Most business owners believe that ‘word-of-mouth’ alone is sufficient to attract and grow customers since they have the ‘best’ product/service. Wrong! You SHOULD invest in promoting your brand to differentiate your product or service from your competition and attract new customers.
Well, how do I account for a realistic marketing budget? I am glad you asked!
While the amount varies by industry, most successful businesses spend anywhere from 2-20% of annual revenue on marketing activities, with the average generally ranging from 4-6%. So, take into consideration what sales goals you want to achieve by and be strategic (i.e. Don’t project that you’re are going to make as much as a the local McDonald’s when no one knows your burger restaurant…yet)
What should be included in your marketing budget?
Everything you use to get the word out:
· Logo – even toddler’s know the Mickey D’s logo
· Website – captive audience for your product
· Flyer’s – promote to local businesses and residents
· Digital Advertising – Social Media, Paid Media, Earned Media, Owned Media
· Business Cards – especially for business who depend on referrals
· Newspapers Ads – local consumers TRUST the local news
· Radio Advertisements – drive time is a great opportunity to ‘speak’ to your prospects
· Commercials – Social Media/YouTube has opened up a whole new world of opportunities
· & so much more!
You may not do all of these things. But it’s important that you first start with a defined budget, then determine which strategy will be most effective for that budget. I recommend talking to similar successful businesses at your local Chamber of Commerce to generate ideas.
Your budget and marketing mix will be determined by your goals and your successes. Over time you will find out what marketing channels work best and provide the best ROI.
Marketing and branding your business is essential for long term success. Make sure you properly funnel resources to your marketing budget and watch how it will result in future profits.