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:
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%.
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.
These are just a few ideas, but you get the idea.
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.
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:
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.
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© Jo Gordon Consulting Ltd 2021