How to Create and Allocate Your Marketing Budget


3 min read
01 Apr
01Apr

Introduction

Establishing a marketing budget is imperative. However, allocating these precious funds takes careful evaluation and ROI tracking to ensure your company enjoys the most bang for its buck! All in all, setting a marketing budget is a balancing act. If you overspend, you risk putting your company under a financial strain, or worse, collapsing entirely. But, spend too little, and you'll struggle to acquire new customers and grow your profits. This is where creating a clear budget and marketing plan is crucial, as it provides a blueprint for allocating the necessary resources for fuelling your marketing efforts.  To help you with that, we've provided a few sure fire tips: 


Let The Numbers Do The Talking

First things first, examine your business's figures. Allow these numbers to guide your overall marketing budget. As you go about doing this, don't forget your operational costs. You'll need to correlate your marketing budget with your operating expenses. Generally speaking, the revenue you generate from boosting marketing costs should be higher than your increase in operational costs. Typically, new brands need to earmark more of their predicted gross revenue to their marketing budget - generally, 12% to 25%. In contrast, established businesses usually spend between 1% to 10%. 


Pick The Platforms You Want Market Yourself On

Once you decide on the platforms and marketing methods you want to use, you can focus on the specific costs you’ll incur. So, go ahead and list all the platforms you want to market on. 

For example: 

Google Ads

Facebook ads

Influencer marketing 

Email marketing 

Instagram ads

Physical marketing materials ...

These are just a few ideas, but you get the idea.

 

Set Revenue Goals

First off, you need to establish revenue goals and then use these to drive your marketing plan. While your specific marketing strategies will vary from brand to brand, you should always keep ROI at the forefront of your mind. 

So, be sure to calculate your expected return on investment for all your marketing activities. If you've run previous campaigns, use this data to fuel your approach - examine the state of your current budget and the results of your marketing campaigns. Pay careful attention to what's working, what isn't, how much you're currently spending on marketing, and whether there's anything you can do to streamline these expenses. 

Alternatively, if this is your first rodeo, get your hands on some market data. Again, you can use these figures to help project the ROI you expect to make from your marketing activity.

  

Allocate Funds to Each Stage of The Sales Funnel

While designing your sales funnel, consider how much you'll spend on each stage. The average small business sales funnel is divided into four steps: 

  1. AwarenessAt this stage, potential customers discover your product or service.
  2. InterestOnce customers know about your offering, they begin to engage with your brand
  3. DecisionHere, customers are coming to the end of their product research and are close to making a purchasing decision.
  4. Action: Now, it's time to seal the deal.

With an ample understanding of the sales funnel, you can efficiently allocate specific funds to each step of your marketing plan. To learn more, get in touch with us today.

 

Production Credit

This article was made possible with the support of these businesses: 

Software Development Company: Remote Resource

Producers of Comfortable Shoes for Professionals: Jhuti


Please ask before reproducing my material partially or wholly for commercial use. 
© Jo Gordon Consulting Ltd 2021

16Jun
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