You can offer the most amazing products or services but, without marketing, sales will be few and far between. Equally, the very best customer service will stand for nothing if you don’t actually have any customers. Marketing is essential for business growth. Moreover, marketing informs potential customers and leads to sales. At the end of the day, if you don’t market your business, no one will be aware of it. Therefore, sales are very much dependent on marketing.
As marketing is so important to a business, whatever its size, for planning purposes, it’s crucial to set a suitable marketing budget. Setting a budget as part of your overall marketing strategy will ensure that all marketing activities are well thought out for maximum impact. Similarly, a clearly set out budget will help categorise expenditure in each of the different areas. As such, this will allow for a wider reach on marketing activity.
A clear insight into your sales process is a good start in building an effective marketing budget. For instance, keeping track of details such as the number of leads you generate per month and how many leads convert into sales is very useful. Equally, the cost involved in getting these leads and securing subsequent sales is critical data when developing a marketing budget.
The operational costs of a business are also integral when calculating a marketing budget. As such, recording the time and labour costs involved in delivering existing products and services is imperative. Furthermore, any additional operational costs needed to increase sales also need adding into the equation.
When estimating the amount to spend on marketing, measured against resulting growth, it’s important to see the cost as one of investment. For example, just like you might invest time or money in order to get a specific return, a marketing budget works just the same. Although it may seem like a standalone cost, increasing awareness and sales makes it a clear investment.
It’s evident that any marketing budget should be closely connected to your business goals. Whether or not you have clearly defined goals, it’s important to set monthly, quarterly and annual objectives. Moreover, setting a budget against these objectives will start to build a picture of how much to budget against the potential business growth generated.
Constantly reviewing marketing budgets set against specific activities can help with future planning. Equally, constantly changing technology and markets together with competitor activity will also have an impact.
The percentage share of different areas of marketing such as advertising, PR, SEO, sponsorship and website development will vary from business to business. For example, an e-commerce business may want to invest heavily in their website.
As such, it’s well worth listing down all necessary marketing categories and allocating a budget share according to the perceived impact on future sales.
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