How To Budget Better When Marketing Your Business

Mar 11, 2021 | Lifestyle | 0 comments

Marketing is essential for attracting new customers. However, it’s very easy to overspend on marketing, which could cancel out any profits gained. Below is a guide on how you can budget your marketing.

1.  How much money should you spend on marketing?

The average company spends around 9 to 11% of their revenue on marketing. Is this enough? Some experts recommend spending more. In fact, it’s generally recommended that new companies spend 20 – 25% of their revenue on marketing, while more established companies spend 10 -15%.

It does depend a lot on the type of company you’re running. B2C (business-to-consumer) companies generally don’t have to spend as much as B2B (business-to-business) companies. If you’re not worried about scaling quickly, you can also get away with spending a lot less (i.e. if you want to stay small and local). In other words, if you’re a small local B2C company, you could get away with spending less than 10% on marketing. 

Every company can benefit from pouring money into marketing before launching their business. Initially, you’ll need to spend money on a website and brand design, as well as designing a sign if you’re opening a store or designing packaging if you’re selling a product – all of which come under marketing. You may even want to pay for PR to get some media attention or host a launch party. This can result in some companies spending thousands upfront. 

There are many ways to save money on marketing if you’re going through a rocky patch (some of these strategies are discussed later). While it’s easier to get results by spending money, it’s important to note that you don’t have to spend money to make money.

2.  Where should you distribute your marketing budget?

There are lots of different types of marketing. Knowing where to allocate your marketing budget is important. Some types of marketing you may want to consider include:

  • Web design and SEO
  • PPC advertising (Google ads, Bing ads and Facebook advertising)
  • Content marketing (videos, infographics, images, blog posts)
  • Affiliate marketing/sponsorship
  • Print advertising (flyers, business cards)
  • Email marketing
  • PR
  • Event marketing
  • Radio advertising
  • App development

Not all of these types of marketing are likely to be appropriate to your business. A small local independent store may not benefit from event marketing or app development and may be able to strip back on many forms of digital marketing. A nationwide manufacturing company aimed at businesses meanwhile may not have to worry about Facebook advertising, radio advertising or print advertising.

The main form of marketing that every business should continuously spend money on is web design and SEO. A decent website and good rankings will get you a lot of new business. This requires constantly tweaking your website and optimizing keywords. 

When it comes to other other marketing tactics, it’s worth experimenting and seeing what is successful for you and what is not. You can there pour more money into the strategies that are successful and less money into the strategies that aren’t so successful. For instance, if PPC advertising is getting you a lot of leads and affiliate marketing isn’t, it may make sense to focus on the former and spend less on the latter. 

So just how should you allocate your marketing budget? Below is a basic guide you may want to follow:

  • 25% on web design and SEO
  • 25% on most effective other strategy
  • 25% on other tried and tested strategies
  • 25% on new/experimental strategies

3.  How to spend less on marketing

While some companies underspend on marketing, others drastically overspend. Learning how to spend less could help you to maximize profits while still attracting customers. Below are just a few tips for spending less on marketing.

Use more analytics

When undertaking any form of digital marketing, it’s important to analyse the data to see how your marketing campaign is performing. This allows you to make tweaks to future marketing campaigns such as ditching certain methods or doubling-down on other methods.

If you’re not using analytics, you won’t know how each marketing campaign is performing and you’re more likely to waste money on marketing. While some trial and error can be useful in marketing, most of your marketing should be based on research and past experience.

There are various different types of testing and analytics that you can look into. The likes of usability testing can help when updating your website, while keyword research tools can help with SEO. Free tools like Google analytics and Facebook analytics can also help you to strategize your marketing. 

Shop around for marketing services

When choosing a marketing company to handle aspects of marketing for you, make sure to shop around. Different companies will charge different rates, allowing you to make big savings.

The most established and reputable companies are typically likely to charge the highest rates. That said, you can still find cheap and reliable marketing services. Just make sure to always research into a company first. Do they have positive reviews? Do they offer case studies of companies they’ve worked with? Does their website look professional? These questions will all help you to determine whether they are trustworthy. 

Take advantage of free marketing

Not all marketing strategies require you to pay money. In fact, some are totally free. These include:

  • Social media posts: Signing up to social media and posting content is completely free. You only have to pay if you want to boost a post or advertise. 
  • Blogging: You can set up a blog on your site and write content for free. Many companies hire copywriters to maintain regular content, but you don’t have to do this. 
  • Vlogging: Got a decent camera and microphone? You create your own business vlog by recording and uploading videos to Youtube. 
  • Direct emails: While mass-mailing usually requires spending money on email automation tools, you can send out individual sales emails without having to pay for any software.
  • Networking: Networking is one of the best forms of free marketing. Simply by talking to people you may be able to find new customers or get people to recommend you. 
  • Encouraging customer recommendations: Your customers can also be turned into a marketing tool. You can ask them to leave reviews or recommend your company to friends. Some companies provide reward incentives for doing this, but it’s not always necessary. 

If you want to save money, consider pouring your energy into these types of strategies.

best,

– a contributed post

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