Allocation of your revenue to Marketing is a necessity for continuously driving new business. Plan for the unexpected by reinvesting a portion of your revenue towards the future. Telling people who you are and what you’re about is a proven and effective way to drive new prospects through your opportunity pipeline. As the old saying goes: you have to spend money to make money. This couldn’t be truer with marketing because it’s imperative that you invest in your business. You must believe in your business and promote it through the many channels.
Here are 5 Good Reasons to Create a Marketing Budget Today:
1. Outsource to the Right Partners
If you have been trying to do all of the marketing on your own, it may not be working out so well for you. The moment you create a budget for marketing, you may discover that you have the money to outsource and hire a marketing company to work on the campaigns for you. With someone focused more on your marketing, you can watch your revenue soar.
2. Utilize the Right Tools
With a marketing budget in place, you can implement analytics, marketing automation, social listening, and email marketing tools. The technology landscape is a gold mine for digital marketers who understand how to execute measurable campaigns on these intelligent platforms.
3. Focus on Efficiencies
Gone are the days where business owners hand over thousands of dollars to advertising agencies and put it towards “brand awareness.” If it doesn’t provide a measurable ROI, then the dollars are perceived as wasted. Focus on a consistent budget with the goal if increasing the leads (revenue) and decreasing the costs (expenses). This is the working formula for more profit.
4. Remain “Always On” and Visible
Business owners who spend their money on marketing “here and there” often times go dark for long periods at a time. Meaning, they aren’t getting in front of their target audience with their message. Build up your marketing campaigns before you need them and you’ll earn a consistent stream of prospects and customers paying attention to you.
5. Allow Room for Testing
Client after client, we find two things to be true. First, there is no silver bullet. Second, you’re not going to get it 100% right the very first time. Every business, every industry, and every product is different and should have a slightly different approach on how it’s marketed. Understanding this, you should have room in your budget for some optimization and testing. Consistently strive for a better result and you’ll ultimately get it.
How to Set Up a Budget:
It’s simple to create a marketing budget by using your current revenue as the baseline. For example, take 10 percent of your revenue and set it aside for your marketing efforts. Meaning, if your business generates $1,000,000 in annual revenue, then you will have $100,000 to work with. Spread that throughout the year (divide by 12 months) and you’ll have approximately $8,300 per month.
The next question to ask yourself is “What portion of that revenue do I want to invest in online marketing?” Your business will likely want to take advantage of local advertising (billboards, coupons, chamber events, trade shows, etc.) and spend the remainder on the fastest growing channels: digital. For our example, let’s say 50% will go to your website, mobile, SEO, paid search, email marketing, analytics, and social media.
Quick Marketing Budget Reference Guide:
- $1,000,000 in revenue = $8,300 per month for marketing = $4,150 per month for digital marketing
- $750,000 in revenue = $6,250 per month for marketing = $3,125 per month for digital marketing
- $500,000 in revenue = $4,166 per month for marketing = $2,083 per month for digital marketing
- $250,000 in revenue = $2,080 per month for marketing = $1,040 per month for digital marketing