Want to spend money on marketing and advertising but don’t know where to start? Determining the perfect marketing spend is almost like finding that proverbial unicorn in business acumen. Most want to know if there’s a marketing spend “sweet spot?” Well, the answer is yes! We will share with you some tricks of the trade to narrowing down your marketing budget that not only meets your needs but will help put the value of marketing and advertising into perspective.
The Percentage Rule
When deciding on a marketing budget, you’ll need to consider what all your marketing budget covers. Typically, one budget will incorporate promotions, public relations, and advertising. It also includes general marketing to maintain your presence on certain social media channels, generate regular email communication, print advertising, Google Ads, and more. So what’s the magic number that you should be spending on these efforts?
As a general rule, depending on the size of your business you should be spending about 7 to 8% of your revenue on all things marketing. This rule allows you to grow your marketing budget as you grow your business while keeping your spending proportionate.
Now, a few factors play into the marketing budgeting process. For instance, if you’re a new business with a very small audience, you may consider investing as much as 12% of your revenue to generate more brand exposure early on. As your brand grows and you gain more exposure, it’s typically normal to back off to the standard 7 to 8%.
Building Your Strategy
Marketing isn’t something to be handled all willy nilly. It should be a systematic approach to build a solid framework for your brand and it’s presence in the digital advertising world. If you’re a new business, your strategy might look a little different from that of a more established one. For instance, you’ll need to think about your branding, determine your target audience, and decide where those people live online. Doing the hard work upfront will save you a lot of time and money in the long run.
You’ll also have more upfront costs such a designing and building a website. All new businesses need a website as it serves as the face and ‘hub’ for the products and services you sell. Not only is it a great place to keep all your information, but it’s also available 24/7. But having a brand new fancy website isn’t all that great if you’re customers can’t find it. This is how advertising and marketing can help drive traffic to your site and with any luck, create lifelong customers.
So, how do you determine how much to allocate to each piece of the marketing puzzle?
First, set S.M.A.R.T. goals and do this every year. Is your goal to drive traffic to your website, gain more exposure for your goods/services, or do you want to create more personalized experiences for the loyal customers you already have? Set goals that are attainable and that you can measure. This will help keep you on track for growth.
Assess Your Strategy
Make sure your strategy and your current framework support your goals. For instance, if your goal is to gain exposure for your brand, you’ll need to have strong branding that’s woven throughout your creative and strong messaging. This will also need to be present throughout your website. Having the right marketing tools will set your business up for success.
Now that you have your strategy and goals all set, it’s time to allocate your marketing budget. Considering the 7 to 8% rule (or even more if you’re just starting out), here’s a graphic to help you know how to allocate costs for the best results to support your goals for growth.
Now that you know how to determine the perfect marketing spend, let’s chat about how we can help! At ARK Marketing, our team is ready and able to guide you through the advertising and marketing world. And if you’re still not sure about managing your budget, we can also do that for you as well! Our goals is to help you stand out among the competition and hit that ‘sweet spot” when it comes to your marketing spend. Learn more about us and the services we offer HERE.
Check back soon for more useful tips on how to leverage your small business in a big world of competition. If you need help managing certain aspects of your small business or you’d like to know more about the services ARK Marketing has to offer, email us or comment below! Also, follow us on Facebook and Instagram for industry news, inspiration, and helpful tidbits for finding small business success.