When it comes to budgeting, marketing may top the list for the most difficult. How much should you spend? If you’re a bigger company, should you spend a higher percentage of your budget, or does it have more to do with the goals you’re trying to accomplish?
There are a few guidelines out there that can help guide your decision. For instance, some experts recommend that you spend about 5% of your total revenue in order to maintain your current market share. For those looking to grow, you’ll need to bump your budget up to 10% of your revenue.
Another line of thinking says that newer companies need to set aside 12% to 20% of their revenue on marketing, while a more established company can back down to about 6% to 12%.
What’s right for you? Here are a few considerations you should keep in mind:
It’s important to determine the purpose of your marketing strategy and how you’ll allocate resources to achieving some stated objectives. For instance, if you are a new company, you may be interested in dedicating more resources to boosting brand awareness, while an older company may be looking at how to launch a new product line to gain additional market share.
You’ll need to allocate funds across many different channels and formats according to your goals: social media, content, email marketing, paid search, website redesign or optimization, mobile marketing and traditional marketing.
No matter how much your marketing budget turns out to be, you’ll want to be able to see if it was money well-spent. Your return on investment will be measured using a few key indicators. Those related to brand awareness may be harder to measure than lead generation, for instance, but you should have a clear way of determining whether your dollars were well-spent.
Do Some Snooping
You won’t be able to assess the exact amount your competitors are spending to raise brand awareness and generate leads, but if you get a sense that they have a strong presence on multiple social media platforms, and you’re not investing in social media at all, that’s a red flag.
It’s challenging to determine where your sweet spot is for a marketing budget, but a word of caution: you get what you pay for. When it’s time to invest in a website redesign, for example, you can choose a template and save a few bucks. However, you may quickly find that your website can only do so much when it comes to optimizing for SEO or customization. It may get buggy fast. You’ll spend more initially with a custom site, but customization offers benefits like better SEO options and a longer life span.
This is true of any area of marketing. You can also create content in-house that’s authentic, but you’re only publishing once a month because it takes too much time to distribute it. Another option is to invest in marketing automation that keeps your content publishing on a schedule and delivers content that’s perfectly timed to the contact’s interest level in your product.
Determining your marketing budget can be tricky. What’s not tricky is reaching out to DirectMail.io. We may not be able to make decisions about your budget, but we can help you determine what’s in your best interest and what’s within reach to grow your brand. Our platform also allows all of your marketing to be completely transparent. You'll know what works, and what doesn't...so you can allocate your budget towards the marketing that is increasing your bottom line.