Did you know that there are over 30 million small businesses in the USA?
Many people have made good use of the economic upturn of the last few years to set up their own business.
However, this has created some issues. Markets in many industries are now crowded. Add to this the effect of COVID-19, and we see a shrinking number of customers. Businesses now have to fight for every customer.
This puts pressure on businesses to ensure that their marketing spend supports strategies that are truly effective.
If you are considering your marketing budget, how much should it be? Use our in-depth article to find out.
1. The Short Answer
How much money should you allot for marketing? The short answer is an average that experts calculate after considering data from many different industries.
The average recommended figure is 5% of your total revenue. If you are looking to steeply increase your marketing revenue, you may want to increase it to as much as 10%; however, this is not for everyone.
If you would like to create a marketing budget that suits your company’s needs, what should you keep in mind?
2. Creating Your Marketing Budget
Your company’s business plane heavily influences your marketing budget. What does your company hope to accomplish in the upcoming two months? The more specifics a marketing department understands, the more accurate their budget will be.
You can separate your marketing budget into three headings.
What goals does the company have? How will the marketing department contribute to them? What revenue goals does management have for the next year?
What growth is your current marketing strategy providing? Is simply upscaling this current strategy enough? Or will it be necessary to create an entirely new strategy?
What will these new goals require? Will you need new personnel or talent? Will it require a dramatic expansion of online marketing strategies?
3. Necessary Items for Your Marketing Budget
When creating your marketing action plan, you will need to budget for the tools that will help you reach your goals. These could include:
- Traditional advertising – The costs of radio, TV, and other traditional methods
- Consultation companies – The cost of researching your target audience using focus groups etc
- Branding and advertising design costs
- Website creation and management
- Online advertising – Google ad words and PPC campaigns
- Curated content marketing – blogs, social media, and other text-based advertisements
In truth, this list could be much longer. However, it should get you started. By creatively thinking about the methods and technologies that will bring you to your goals, you can predict your market spend more accurately.
4. Monitor the Success of Your Tools
You should learn the costs associated with and the success rates of the marketing tools you currently use. When considering your usage of paid tools for the upcoming months, it is important to evaluate whether to keep using them.
There are continually new tools appearing in the market. Each time you assess your market spend budget, you should take the opportunity to consider whether alternate tools are available, as well as the cost of moving to newer programs or tools.
Many marketing tools have a free version to use that may provide everything that you need.
5. Leverage In-House Skills
Whether your business has five employees or 500, there are almost always hidden talents that you can draw on. Using in-house talent provides resources to your marketing department, and it can also inject enthusiasm into a workforce.
Could a person who is on social media become your new social media manager? Could an employee who surrounds his desk with personal photos become an in-house photographer?
It may not be difficult to convert a hobby into a skill that your company can leverage. Further, when employees see that your company promotes from within and is interested in using personal skills, they may be even more enthusiastic to offer their services.
6. Leverage Freelancers
When trying to predict your marketing spend, you undoubtedly realize that the lower your budget, the more chance that management will approve it. A great way to get more bang for your buck is to use freelance talent.
Whether found locally or via freelance websites, using freelance workers will give you an opportunity to access key talents at a reduced cost.
This is not to say that freelancers will quote you lower rates. However, you will not need to keep them on staff, meaning that this financial outlay relies on need. You may only need their talents for a short period of time, such as a few weeks.
Freelance workers can help you build your website, improve your SEO, provide help with Google ads, and really anything you need.
Employing freelance workers is a great way to make the most of your market spend.
7. Benefit From Other Revenue Sources
Right now, there are a number of government and state incentives and support structures to keep businesses active. These may offer funds to directly support your marketing strategy. This will influence and benefit your market spend.
Other than government programs, there may be other sources of revenue that can support your market spend. As you are regularly creating content for your website, likely in video and image format, can you monetize this? This money could then be used to increase your market spend budget.
Understanding More About Marketing Spend
Budgeting for market success can be complicated, especially in the COVID-19 era. However, by applying these principles, companies can make good use of funds and see a higher return on their marketing spend.
If you are interested in learning more about marketing and eCommerce solutions, then we are here to help.
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