Marketing, or Money Pit? How a Budget Helps You Manage Your Spend
While we may be skewed a little in favor of marketing, we understand that there are other business considerations that you have, all of which require the backing of some dead presidents. Of course, chances are that you only have so much money to commit to your business, so it helps to have an idea of how much you’ll need when it comes time to divvy it all up. Well, we aren’t accountants, but we know a thing or two about money where marketing is concerned - namely, how much you should probably be spending on it.
The Purpose of a Marketing Budget
Fact: marketing costs money, and if your business is like most, you only have so much to spend. As such, it is important that you spend what you have available in the most effective way possible - a way that has a sufficient ROI attached to it to support your investment into your marketing. A budget allows you to establish a plan for your spend - how much you have, and how it is to be utilized for optimal efficacy.
This is particularly important to establish for your marketing. We have stressed how important consistency is in your marketing for years now, as it helps to reinforce an impression of dependability in the eyes of your prospects. A carefully planned budget helps you to establish that consistency by ensuring that you can support predictable marketing initiatives throughout the fiscal year.
Why is this so important to do? Look at it from the eyes of the person you are targeting, or really, think about the services you choose to work with. Would you work with someone who was inconsistent in their marketing (and presumably, in their service delivery), if you had the choice? Probably not, and your audience feels the same way about the people that they choose to work with. In fact, without consistent marketing, there’s a good chance that most of your audience won’t remember you enough to include you in their decision-making process at all.
So, you clearly need to have a carefully created budget to inform your marketing spend--but what does that entail, exactly?
What Your Marketing Budget Should Include
There is no lack of information that is crucial to preparing a proper budget, much of it determined by your business’ particular circumstances. For instance, your marketing goals will have an influence on how your available funds are distributed, and how that balance will shift throughout the fiscal year. If your goals are initially focused on aggressive lead generation and conversion, but you have plans to transfer your energies to retention and referrals later in the year, you might want to initially invest in campaigns dedicated to education and transfer those funds to client appreciation and community building at the start of Q3.
Again, your particular goals may (and likely will) necessitate an entirely different strategy. As a small-to-medium-sized business, the budget you are able to play with will also have a role in what you are able to accomplish. Having said that, every marketing budget should include:
- The total amount you have to spend for the year (AKA your total annual marketing budget). This is often generalized as about 10 percent of your annual revenue, but that can vary somewhat. The CMO Survey, an online survey conducted twice each year, requested a survey of 2796 marketers at for-profit United States companies, with a response rate of 12.95 percent. Their results show that this does vary, but this benchmark isn’t being reached by very many. Instead, most companies seem to be aiming for about 10 percent of their firm annual budget.
- The marketing channels and categories you plan on leveraging also need to be reflected in your budget. This includes any investments you plan to make (or have made already) into things like content marketing, pay-per-click, your website and its content, and many more factors that you might not have considered without really thinking about it.
- The amount you plan to invest into each channel and category over time also needs to be included. Granted, this seems that it would be included in the last bullet point, but it is important enough to mention separately. After all, we’ve mentioned how your focus might shift once certain benchmarks have been met, so it only makes sense that your spending be shifted as well. You just have to make sure that your final total doesn’t exceed your total annual marketing budget.
Other Kinds of Investments
It also should be mentioned that your budget should include a timeline of when these investments are to be made as well. Again, your marketing should be a process, each step with a defined beginning and end, hopefully culminating in improved business for your company. Therefore, in addition to the funds you need to dedicate to each step, you need to state how much time you plan to invest into each step as well.
How long will each project or campaign be run for, and what non-material resources will still be expended as a result? How much time will you invest into steps one, two, three, and the rest? How will this influence how your employees can be utilized? How will all of this eat into your other needs and responsibilities, and yes, your other financial investments as a result?
The Bottom Line About your Bottom Line
When it all comes down to it, you have to be the one to weigh out which investments you can and can’t make. That being said, you don’t have to go it alone. We can help with our marketing plan and the calendar that we prepare for you. We’ll recommend how you should commence with your marketing, based on where you stand, and give you a calendar and budget to follow, if you so choose.
For more information, reach out to our team at 888-546-4384.