How to plan a strategic business marketing budget.
As a business owner, you know the importance of growth to your business. And if you’ve ever created a plan to achieve it, you know the critical role marketing plays in triggering your growth.
But just how does marketing fit in with your overall business plan? And, more specifically, how does business marketing fit in with your overall budget? You have questions, and here are a few of our answers…
Q: How much of my overall budget should go toward marketing?
Speaking in generalizations and averages, your business marketing budget should probably be around 5-10% of your overall budget. Again, let’s be clear: that’s just an average, not taking into account the many variables of business. If you’re a startup or are launching a new product or service, that number should probably be closer to 20% or more for the first couple years. Of that percentage, the budget should be fairly evenly split between internal brand development costs and external promotion costs. Once you’ve achieved good brand awareness, your marketing costs may start to take up less of your overall budget.
Q: I know marketing is important, but we’re on a tight budget; give me some good reasons why I should spend money on marketing.
When there are a lot of things fighting for priority and not enough resources for all of them, it can be easy to skimp on marketing projects and costs. But here’s a thought: if you open the doors to your business but don’t hang an “Open” sign or put your business name out front, how will people know to come in? It’s simplistic, but marketing is your business’ “Open for business” sign. Marketing has evolved and there are many places you can choose to invest your marketing dollars and time, so being strategic is important, but you have to find out where your target market is looking and then consistently put your “sign” there.
Q: How do I get the best “bang for my buck” with marketing?
Part one of the answer is that you must have a marketing plan! If you don’t have a strategic marketing plan with goals, mile markers, and checkpoints, you essentially will be flushing your money down the drain. Part two of the answer is be ready to change the plan. You may try something that flops completely, causing you to change course midstream. You also might find an experimental form of marketing that yields incredible results, and so you may increase funds for that approach more than you originally planned. The point is to always be evaluating the effectiveness of your marketing. Give new courses of action the time needed to gain momentum, but don’t be so committed to an idea that you keep pouring money into something that proves no ROI.
Q: What kinds of marketing should I focus on?
We have to start with a general answer: there is no absolute rule. The answer to this question will very heavily depend on your industry and your target demographic. What we do know for certain is that the need for businesses to be strategic in their online promotions is only going to grow. Here are some facts for your consideration.
- 20% of Facebook users have purchased something because of ads or comments they saw there, (source)
- 64% of smartphone owners are using their mobile devices to shop online. (source)
- Companies gain a 185% lift in Web traffic after getting 1,000 likes on Facebook, and businesses with 51-100 Twitter followers generate 106% more traffic than those with 25 or fewer followers. (source)
- SEO has the biggest impact on lead generation for B2B and B2C companies. (source)
- Companies that publish new blog posts just 1-2 times per month generate 70% more leads than companies that don’t blog at all. (source)
Making your business marketing budget a priority is important. Developing a solid marketing strategy will make those dollars and your effort work hard for you. What types of marketing have been most successful for your business? What strategies have worked well for you? We’d love to hear your input!