How much should you budget monthly for your marketing?
A marketing budget is essential for any business. However, since every business is unique, there is no hard and fast marketing budget that works across the board. The ideal marketing budget for you will depend on your industry and a number of factors like revenue, stage of business, business size, marketing channels, and the buying behavior of your target audience.
Your goal should be to maintain a healthy revenue stream while still investing in the marketing you need to promote your offerings and grow. Let’s take a closer look at marketing budgets and how they work so they can determine how much to budget for yours.
Marketing experts recommend that you allocate a percentage of your projected revenue to your annual marketing budget. If you’re unsure of what that figure should be, the rule of thumb we’ll further explore below is a solid starting point.
What is a ‘marketing budget?’
A marketing budget is a vital part of your overall marketing plan. It refers to all of the money your business intends to spend on marketing-related initiatives over the quarter or year. These initiatives will be intended to promote existing or future products or services. Your marketing budget may include costs for paid advertising, marketing automation, sponsored web content, public relations, and even the salaries of employees in the marketing department.
Use the rule to budget for marketing
The U.S. Small Business Administration (SBA) suggests that small businesses with revenues of less than $5 million dedicate between 7% to 8% of their revenues to marketing. In a study by Databox, 52% of businesses are spending between $5 to $15k per month on marketing.
Of course, decisions related to how much you allocate for marketing will depend on your business stage, industry, and goals. If you’re a B2C organization, for example, you’ll need to budget more for more marketing than a B2B operation. Also, if you’re a startup, you may benefit from a higher budget because you’ll want to build brand awareness and attract your target audience.
Once you become a more established business with a steady customer base, you can reduce your marketing budget. Note that at this stage, however, you’ll still need some type of budget to retain existing customers, attract new ones, and promote new offerings.
Stretching A Small Budget
If you’re a startup or a newer business, you might not have limited funds to put toward marketing. The good news is there are ways you can stretch a small marketing budget. Here are some ideas.
Use Social Media
Social media networks like Facebook, LinkedIn, and Instagram can do wonders for your marketing goals. Once you figure out which platforms are most effective for your customer base, you can use them to attract highly qualified leads that lead to conversions. To start, you may want to create company pages that incorporate your logo and marketing messages. Then, update them on a regular basis with interesting information about your business.
Create Website Content
By creating valuable content for your website, you can position your business as an authority in your industry. In addition to the main landing pages, like your home page, about us page, and frequently asked questions page, consider blog posts. Come up with blog topics that engage, intrigue, and educate your audience. Infographics and white papers can improve the marketability of your site as well.
Harness the Power of Email Marketing
Email marketing is another cost-effective, high-return marketing strategy that should be on your radar. Once you build up an email list with incentives like coupons and downloadable white papers on your website, you’ll be able to email your audience. You can send a mixture of promotional and educational emails that encourage current and prospective customers to visit your website and purchase your products or services.
Build a Referral Network
Fortunately, there are many ways to secure referrals online and in person. First, start with your most loyal customers. Ask them to refer their friends and family in exchange for a small gift or a special discount. You can also encourage others to follow your business on social media and interact with your content. In addition, consider getting involved with a referral or professional networking group in your local area.
Stay Focused and Consistent
Marketing success doesn’t happen overnight. That’s why you need to make an ongoing effort to implement your marketing strategies while you monitor your budget and look for free or cost-effective opportunities to get your name out there and land new customers while you retain current ones.
How To Get The Most Out of Your Marketing Budget
Once you determine your marketing budget, your goal should be to spend it as effectively as possible. These tips can allow you to do just that.
Identify and Target Your Audience
Uncover who your typical customer is. What is their age, gender, occupation, and income? You can interview existing customers after they buy your products or services, use Google Analytics to research your demographics and online behavior, and explore reviews on third-party sites like Trustpilot and Yelp. The information you gather will be invaluable when you design your marketing messages and execute your strategies.
Recycle and Repurpose Content
While producing quality content is essential, it requires time and money. That’s why it’s a good idea to repurpose your existing content. For example, if you wrote a white paper or ebook, turn the content into smaller blog posts. You can also use images from infographics on social media posts or print physical copies of blog posts and position them as ads at trade shows.
Focus on Immediate Positive ROI
Think about where your customers visit the most when they’re ready to buy your offerings. They might be ready to convert after they perform a Google search related to one of your products. Or maybe they read review sites or social media posts before they commit. Once you understand this, you’ll be able to concentrate on what can bring the most immediate positive ROI and avoid spreading yourself too thin.
Set SMART Marketing Goals
Without goals, you won’t know whether your marketing investment has paid off. By creating SMART goals, you’ll know what steps you need to take to generate results in the time frame you’ve chosen. SMART is an acronym for the following:
- Specific: You must be as concise and specific about what you hope to accomplish. Instead of simply saying you want to increase traffic, for example, say you want to increase site traffic by 40% in the next year.
- Measurable: Measurable goals are ones you can actually quantify and track. Make sure your goals have measurable outcomes. In the example we mentioned above, increasing traffic by 40% is measurable.
- Attainable: Goals are only effective if you can realistically achieve them based on your resources, skills, and timeline. While it may be possible to increase site traffic by 40% in the next year, it’s unreasonable to do so within a month.
- Relevant: Your goals should be relevant to your specific business. If you can’t handle a significant jump in website traffic, saying you hope to increase it by 40% is irrelevant.
- Time-Bound: Time-bound goals are those with set deadlines by which they should be achieved. Without deadlines, it’ll be difficult to understand whether you’re on the right track and achieving your goals.
Marketing is an Investment
Be sure to think of marketing as an investment, rather than an expense. It’s what you need to reach potential customers and drive sales. As long as you’re strategic about how you spend your money and dedicated to your initiatives, you’re bound to succeed.
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