Entrepreneurs have to be a little bit of an expert in all areas of their business, at least in the early days. Whether you are a service or product based business there's no shortage of decisions to make. Entrepreneurs are the R&D team, the customer service team, the finance team, and the marketing team and so on.
One of the first questions many entrepreneurs have when they consider a new marketing channel like email marketing or paid traffic isn't 'How much will this bring to my business?' but rather 'How much will this cost my business?'. It's only natural!
In this post we'll look at three things to consider -- goals, costing and tracking --when setting your marketing budget.
Photo by Campaign Creators on Unsplash
Spoiler alert...there is no one formula for how much you should be spending on your marketing. It fluctuates for every business let alone industry. The simplest rule of thumb? Without marketing you may struggle to convert sales. Without sales the business will not be able to afford marketing. It's quite literally the chicken or the egg but with these pointers you will be able to make informed marketing budget decisions.
Set Clear Goals :
Define the objectives early! What result (B) do you want action (A) to make? Are you trying to increase brand awareness? Drive sales? Expand into new markets? Choosing channels and setting budgets that directly support these goals -- and the highest returns -- is important.
Costing:
Think of your strategies in the short term and the long term. Immediate goals like growth on social media or promotions are 'short term' whereas increasing SEO or improving your content marketing strategy are more 'long term' goals. Setting a balance on your budget between short term and long term strategies will help you spread your spend and hopefully, improve your ROI (Return on Investment).
Factoring in the cost of tools and resources -- including your time or the time of a 'fractional' or freelance marketing consultant -- will help you build a robust budget. Tracking your service costs (i.e. email marketing, platforms, graphic design tools like Canva etc.) will help you to plot the monthly spend on marketing tools in your budget. Are you perhaps spending on an area that you're not utilizing? Reviewing the expenses against the results will help you determine areas of improvement.
Track and Adjust...Regularly:
Monitor your marketing performance! Track the performance of campaigns and and tweak the spend where stuff is working. Regular reviews means that you are keeping an eye where your money goes -- and where your money comes from. If you're not already running monthly reports on your various channels consider setting this as part of your review process. If you're able to use Google Analytics for your business this tool can help you see at a glance which channels are generating revenue which you can then compare to your various service platform records. Be warry of attribution; each service provider wants you to think that their service is the best in the business so they may get creative with their figures. If two channels are competing, niche down and see the specifics of their performance before you make a call on increasing or decreasing spend.
Summary:
When you are designing a marketing budget it's important to have clear performance goals, an understanding of the costs associated with the channels for the business and to regularly track -- and adjust -- campaigns to see the best results for your brand.
Get in Touch.
Have a question about marketing and budgets? We can help! Write to us at liz@litirmarketing.com today.
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