If the word “budget” were a person, it wouldn’t be up for any awards...In fact, hearing the word “budget” may cause visions of dollar signs, excel spreadsheets, and can send even the most strong-willed of us to the freezer, desperate for a pint of ‘Ben and Jerry’s’.
But creating a marketing budget doesn’t have to be an excruciating process. You should recognize that marketing is a very important component when it comes to the future success of your business. You will, however, want to be strategic about how you spend that budget.
The good news is that most of the information you’ll need for this budget doesn’t come from complex algorithms: it comes from you and your business.
Here are a few steps to help you tackle your marketing budget head on:
1. Start with the 5% rule
If you’re wondering how much you should spend on marketing, start out by collecting some basic information about your business: your total revenue.
On average, small businesses dedicate about 2-5% of their sales revenue to formulating a marketing budget. The Business Development Bank of Canada (BDC) notes that it’s also common for businesses to spend as much as 5-10% of their revenue on marketing strategies in order to meet specific business objectives.
If your jaw just hit the spacebar, you needn’t worry about strictly adhering to these guidelines: No one from the BDC (or Symetric!) will show up at your business to do any finger wagging. Remember: This 2-5% rule is only a general guideline and must be revised every few years to reflect your company’s growth, and to create room for new goals. Look at what your competitors are doing and make note of where they’re allocating their resources.
It’s also common for newer businesses to allocate extra money to their marketing budget in order to establish the company’s brand identity, and create a website. A solid foundation will benefit your business in the long run, since it’ll be easier to implement new marketing strategies.
OK, so now you’ve calculated your budget and, if you didn’t have one already, launched a killer website that communicates your brand and is tailored to your customer base. But, before you take centre stage and wait for thunderous applause, you’ll need to tap into your budget’s full potential.
2. Understand Your Customer Data
When you know your audience, you’ll unlock vital information about the buyer’s journey (like site visits, leads, and leads to sales) that will help you nurture your sales and strengthen your strategy. If you have a Customer Relationship Management (CRM) tool, you can review data that’s housed in the CRM to see:
The number of visitors your site has per month
The number of leads you get per month
How much money you spend on a new lead to make a sale
The difference between dollars earned/dollars spent
Focusing on these statistics will help you streamline your marketing efforts to generate better results for your company. Juxtapose your sales against revenue: how much money do you have to invest to make a sale? Compare your deal closings with those customers who haven’t moved into the “buying” phase. What made them lose interest? Perhaps you’ve been funneling your resources into print ad campaigns that aren’t increasing your views or sales. Knowing what your target audience responds to (or doesn’t respond to!) will help you eliminate ineffective strategies early on.
3. Make Marketing Goals
Ask yourself: what are my goals moving forward? You’ll have many goals in mind but, start with the SMART acronym and make goals that are: Specific, Measurable, Attainable, Relevant, and Timely.
After carefully looking at your customer data, one goal you might have is to double the number of new visitors on your site. Maybe you want to see greater engagement with your social media, or a greater frequency of customer inquiries.
Different goals will require diverse strategies, so don’t use the same marketing tactics for different goals. For example, while e-mail campaigns might increase sales for existing customers, you shouldn’t rely on e-mail campaigns to help you reach new customers (who aren’t on your mailing list).
Outlining your marketing goals stops you from throwing money at strategies that don’t make sense for your customers or for your business.
4. Start Spending!
Now that you’ve determined a comfortable budget, reviewed your customer data, and set a few goals for your business, it’s time to start spending. For most of us, spending is the easy part, too!
Do a little research while you’re fine-tuning. If you have competitors whose websites you admire, make note of the marketing strategies and techniques they use to drive sales.
When you see results, you’ll spend money where you need it most. And try to view your efforts as an investment, not a loss. An effective marketing strategy will increase total revenue. Monitor your revenue and analytics closely to determine whether you’re on track to meet your goals—and make sure you consider your operational costs, too. Don’t be afraid if you don’t see results within a few days either: it might take up to six months for your marketing efforts to really make a difference.
When you meet your goals, don’t stop there, either! Review your budget and make new goals to keep your business thriving and profiting.
Or, instead of following these steps, you could . . .
Spice things up by recruiting one of your favourite, local web-design companies (That’s us!). Let Symetric customize a marketing strategy that’s tailored to your budget. Because, let’s face it, it’s a lot of pressure to do the research on your own. Request a quote and contact us today!
We’ll make sure that you have room in your budget for that tub of Ben and Jerry’s. But this time, it’s for celebrating your budget, not stressing about it.