The best marketing doesn’t feel like marketing. – Tom Fishburne
How many times have you heard that catchy concept of great products selling themselves?
And it has probably made you wonder whether you should pour all that money into marketing and advertising campaigns. If your product is great, that is.
The truth is that in today’s fiercely competitive and saturated marketplace, it’s more important than ever to promote your products and services and set your company apart among your competitors.
Besides, people need to hear about your fantastic product before they can decide to give it a try.
Given that 89% of Irish households have internet access, while 7 out of 10 internet users spend time on the web every day, it’s quite obvious that digital marketing can help you improve the visibility of your company and spread the word about it.
So, think of your marketing budget as an investment, not an expense.
But you need to plan your spend carefully if you are to succeed.
Create a Game Plan
First things first.
Having a well-thought-out marketing plan should be your main focus before you start thinking about numbers.
This is a list of questions that you should ask yourself when you’re working on it:
- Why does my business exist? According to Simon Sinek, this “why” defines the core of your business and explains its purpose.
- What are my business objectives and how to accomplish them? Don’t forget that every objective needs a timeline attached to it.
- Who’s my target audience and where I can find them? This is the part where you should create your ideal customer profile.
- Who are my competitors? You need to find out where you stand and how you stack up against other similar companies in order to be able to step up your marketing game.
- What makes my business distinctive? Define your unique selling proposal, that is, the reason why people should pick you over your competitors.
- How much will I charge? Define your pricing and align it with the value and the clear benefits that your offer brings to your customers.
- How will I reach my target audience? Outline your promotional plan and list all the marketing tactics that you want to use. Start small with three to five particular activities that will help you execute your strategy.
- What particular tasks do I need to complete if I want to achieve my marketing goals? For example, establishing objectives, deciding on your CTAs, and getting someone to craft you the copy can be some of the steps.
- What are my results and what should I improve? Monitoring your metrics is crucial for the success of your marketing strategy.
What you may be asking yourself now is:
How much money should you spend on your overall marketing efforts?
This question puzzles many SMB owners, especially since they’re usually strapped for cash and can’t exactly splurge on fancy commercials and ads.
And yet, there’s no one-size-fits-all answer.
According to the recent Gartner CMO Survey, marketing budgets hovered around, on average, 11.2% of company revenues in 2018. CMOs expressed optimism regarding the growth of their budgets in 2019, despite global uncertainty – even though the Irish economy could suffer a 7% GDP hit due to Brexit.
Your decision pretty much boils down to 3 factors:
- Is your business established? If your company is still bordering upon obscurity, then it’s a good idea to spend more and put it in the spotlight.
- What’s your industry? Research how much your direct competitors are spending.
- How much can you afford? Don’t spread yourself too thin and risk jeopardizing your financial stability, especially now that there are numerous affordable and yet effective marketing tactics.
Here are a couple of methods that can help you set your marketing budget:
- Revenue percentage. Based on this approach, new companies should allocate 12-20% of their gross revenue to marketing. Too much? It’s certainly a significant amount, but you need to reach your target audience and inform them about your product. The thing is, young enterprises need to attract new leads, establish their brand, and build a reputation. Naturally, all these activities come with a hefty price tag. But, once you achieve these objectives and develop your company, you can bring down your budget to 6-12% of your gross revenue. One of the benefits of this method is that it allows your budget to grow together with your business, thus additionally expanding your presence and brand awareness. However, if your margins are below the range of 10-12%, or if you’re operating at a loss, this method isn’t the best solution.
- Fixed budget. Sometimes small businesses have to plan within their means and opt for a fixed amount that they can afford. But this method requires a detailed marketing strategy. It’s crucial to determine what kind of campaign is the most effective for your business, as well as what you want to achieve with your marketing efforts – bring in more traffic, increase sales, or grow your social media following. If you’re not sure about how much money to allocate, talk to your fellow entrepreneurs, or spy on your competitors, but make sure that you’re in the same league both in terms of revenue and size.
Allocating Across Different Marketing Channels
Digital marketing is on the rise, that’s for sure, but this doesn’t mean that you should abandon traditional methods completely.
You need to find out what works for your business and split the budget accordingly.
While the average company is expected to dedicate 42% of its overall budget to digital marketing, some industries can still greatly benefit from direct mail, TV commercials, billboards, and similar old-school methods.
It’s best to combine several strategies and channels but make sure to identify what your target audience prefers.
When it comes to cost-effectiveness, it’s worth mentioning that though certain approaches might initially require a substantial amount of money, they’re capable of generating a high ROI very quickly – PPC is one of them.
Let’s see a breakdown of indispensable marketing platforms that you should leverage.
- Email marketing. It’s true that some marketers believe this strategy is on its last legs, but stats say otherwise. With an impressive 4400% ROI, email marketing should be an indispensable weapon in your marketing arsenal. It’s particularly helpful for building loyalty, and you can use it to send informative and helpful newsletters to your clients, in which you’ll let them know about your latest product updates, news from the industry, or share useful pieces of content or how-to guides.
- Social media marketing. Social media platforms can be used to expand your reach and build brand awareness and recognition. However, small businesses should be careful and focus on one or two channels favoured by their audience. According to a survey, Facebook is the most popular network in Ireland with 46% of those registered who use it regularly. It’s followed by Instagram (24%) and Twitter (20%). Monitor your metrics and optimize your social media strategy based on the engagement of your followers.
- Content marketing. Nurture your audience by creating helpful, educational, and entertaining content packed with valuable advice. Hire a professional writer who will know how to address your audience’s interests and pain points in the best way and attract them to your blog.
- SEO. This strategy is something worth investing in, even though it’s pricey. The fact that it takes some time before you notice the first results shouldn’t bother you. In the long run, it will improve your rankings and show your content to the right prospects, outside of email marketing SEO has the highest long term ROI.
- Paid Ads. Don’t neglect promotions on social media channels and SERPs. Facebook is limiting free exposure posts, meaning that unpaid views might reach only a small fraction of your audience. Besides, in 2016, organic reach plunged 50%, and you need to boost it with a financial injection.
Once you identify which one of these strategies works best, double down on it.
The key to creating a successful marketing budget is in finding the right balance. If you spend too little, nobody will know about you, but if you’re extravagant, you’ll run out of money without accomplishing much. Rely on numbers, metrics, and ROI instead of educated guessing when it comes to allocating funds for different marketing platforms.