Shaping Your Marketing Budget

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The Problem

We just can’t afford marketing right now. We have a Facebook page, so we will be okay.

This may be something you’ve said or heard when it comes to marketing. Some startups are content with perpetually kicking the can of marketing further down the road, in hopes of one day having the resources to initiate a full-scale marketing strategy. It’s the classic ‘chicken or the egg’ scenario; you need sales to invest in marketing, but you need marketing to increase sales. So when and how do you start? The “when” is now. Marketing is an essential element of doing business. While the advancements in marketing technology have provided much more cost efficient and cost effective tools; there is no substitute for a full developed marketing strategy with an allocated budget. Startups usually operate under the pressure to increase growth with razor thin margins, which can lead to a hyperfocus on quick fixes.

One common misconception is that marketing begins and ends with social media feeds. While word of mouth is a great way to build buzz and garner loyal customers, most in part because it’s free, in reality, building a customer base will require some upfront investment — that includes your time and money.

The How

So how do you figure out how much money to invest and then where to put it? The perfect marketing budget for your company will be completely unique, which means at times you’ll be using the trial and error method. Properly deciding where to focus between the email marketing list, content management strategy, and the editorial calendar can be a complex maze to navigate. But you don’t have to jump in with both eyes closed. As a general rule, businesses with revenues less than $5 million annually should try to allocate 6-9 percent of their revenues to marketing. As with any portfolio it should be diverse.

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The Why

Few businesses, big or small, fully trust their marketing efforts enough to properly allocate enough of this budget to create effective campaigns. Deciding how much money to devote to marketing is a major step, but a more complicated issue — and one that has a much bigger impact on the success of your business — is when, where, and how to spend your marketing budget. Smart planning is key to discovering the perfect marketing budget for your company. Examine your current marketing efforts, determine what channels are bringing high-value traffic, and cut back on what isn’t. One way to cast out some doubt is to use the tools available to properly track, analyze, and optimize your marketing efforts to lift your business. Courses like Google Analytics for beginners are free of charge; the only thing it’ll cost you is your time. Google analytics allows you to determine several factors, like the top sources of the traffic to your site and where your visitors are clicking. By checking specific parameters, you can adjust and allocate your budget accordingly to make sure you are taking advantage of each visitor to your site and increase your ROI.

The Plan

Examine your current processes to see where you can streamline, determine which marketing efforts are generating a positive ROI, and cut back on what’s not working as well. Scaling back before you scale up mitigates the chance of unexpected growing pains and keeps your marketing strategy running smoothly. Its very important to remember to set aside a portion of your marketing budget for experimental endeavors. You must be open to trying new avenues and methods to reach new prospects. Examine all aspect of your marketing strategy and develop a complete marketing plan that targets your customers. Once you have, your marketing budget will almost allocate itself because you will know where to focus rather than just throwing ideas at a wall. As you work through the process, you’ll be able to form a lucrative funnel to your site with a marketing plan that is well within your budget.