Plan your Marketing Budget Now
Almost every business wants to gain investment in digital marketing channel. The small businesses have properly budgeted out their strategy for marketing. It does not matter if they have existed for years or they are just new because they know that a marketing budget is a must.
You as a business owner can see the amount of money your business is spending, where your efforts are directed, and the money you have available.
Some small businesses get intimidated so they do not practice budgeting. Other business owners get worried that it might reveal something they refuse to see. That is why they choose to put it off and be ignorant about it, but this is wrong.
If there is no budgeting strategy, your company will not have a goal on how it should measure itself. No one within the company will not be accountable including the management.
Therefore, you must do it for your businesses.
Establish What Your Marketing Goals Are
Do you want to increase online conversions by 200% in the next 2 months? Do you want to get more leads this month for your business? Do you want to inform people about the product launch of next season? Are you fully prepared to make a product launch using your new online marketing strategy? There are many questions to ask based on your goals because they will be different when you establish your marketing goal. The goals you have will be converted into a marketing budget by allocating funds towards the goals where results are needed. Do not listen to the strategy of another marketing department if you have goals to achieve.
It will now be easy to calculate how much money you need to spend each month on marketing to achieve your goal. No matter what your goal is, it will give you a clear direction when you decide on your budget for marketing, and the KPIs that you need to measure efforts. The number of customers you must acquire in hitting that goal, or the leads that become prospects and then customers.
You Must Know Who Your Customers Are
Before you create a marketing budget, you must know which channels you must you can communicate with potential customers. This consideration you need to make requires you to take a deep look into who your target audience is so you can learn the information you need.
You must ask these questions:
- Which age group are you aiming for?
- Which income level are you targeting?
- Which geographical area do you want to attract? City? Suburb? Rural area?
- What are the brands that your target audience regularly interacts with?
All this information can be found when you research the industry you belong to. After you have understood what your potential customers want, you can determine how you can guide them to make a sale.
Building a marketing strategy that is effective needs a deeper look into your sales funnel. At first, they will become aware of your product, gain interest, consider, intend to buy, evaluate the product, then make a purchase. You must track results in the entire revenue cycle, from being a prospect until they make a purchase.
Review this sales funnel data to find out what you will need for marketing:
- The number of monthly visits they do
- The number of leads that are generated each month
- How many leads became sales, and qualified leads (SQLs)
- The cost needed to generate SQLs
- The number of leads that became opportunities
- How many of these opportunities were leads
- The opportunities that became new deals
- The average revenue or value for each new deal
Gathering this data from a digital source like a marketing automation platform can simplify this process. You can also use customer relationship management (CRM) software for this.
Determine the Budget You Need but it Should Always be Agile
The primary step is to find out what your total yearly budget is. After you have set the yearly sum and approved it, that is the time you can make a monthly plan for it. The yearly budget must be fixed, but if you can see that the budget plays out well each month, you can be agile in any month.
Agility is used like this in an annual marketing budget:
If you are taking a closer look on how your current marketing activities are, you can see where you can apply agility. For instance, if you see excellent results from one campaign in a certain month, continue it.
Putting a limit on this successful campaign just because your budget for it was set 3 months ago is not automatically the right thing to do. You can allow to let the campaign continue running, and check if it will bring you more results. After that, you can adjust the budget so you can accommodate any unplanned spending increase.
Set the Operational Costs You Have
Compared to the other tactics that are helpful in listing your operational costs for small businesses, this is straightforward. You must create a spreadsheet that has all the current, or operational costs that are anticipated. The costs could include sales tax, web hosting, professional fees, fees for content outsourcing, and other things you need for running your business.
The calculated essentials for your business show a realistic picture of what you must work within your marketing budget.
You must know the exact amount of money that goes in and out to create a marketing budget for your business and stick to it.
Consider Special Events
The marketing budget is set not only to about what goes on in the company. You must consider a range of seasonal events like holidays and events in the industry. Seasonality impacts heavily on how and when you are investing in your marketing budget.
For instance, if you are not a B2C company retailer, it might be a bad idea to scale your budget during the fourth quarter. That is because the retailers worldwide can aggressively tap into every existing channel so that sales can be maximized.
The result leads to a high increase in cost per click (CPC) in all main channels. There is fierce competition, and the conversion rates must be a lot higher to make up for the CPCs.
This is also applicable to holidays because you do not want to overdo marketing messages while your target audience is on vacation. You must also remember that regions have different days of vacation and national holidays. This is why you must make sure to customize the marketing budget according to your target country’s holiday calendar.
You can also check your industry so your budget can be streamlined. These industry events give you a big opportunity for marketing. Smartly plan your budget based on these events in order to capture the audience when you have more engagement than usual.
If your company will attend a certain event, it is an excellent opportunity to connect online and offline with your customer’s journey. After that, you can generate leads that can become meetings, and then you will have gain customers.
Take Your Revenue into Consideration
After you have created a plan, you can determine the marketing budget size and then you can allocate the funds. One common practice is to allocate a certain percentage of your marketing cost’s gross revenue. However, there are a couple of factors to consider. nor
At this point, you must already know how much your yearly sales will be. This projection helps you decide on your doable marketing budget. Majority of small businesses spend about 10% of their yearly marketing revenue. However, if your business is new, you might have to spend more than an established company. Your bigger budget in the beginning helps to build brand awareness and publicity.
Scope Out Who Your Competition Is
If you are setting a marketing budget for your small business, it is important to understand your niche.
Monitor your competitor and study the marketing campaigns they have.
Think about the major players in the same industry, and their advertising methods.
Then, you can outline what they have in common. Do they use physical marketing collateral compared to digital ads? Do they invest in all marketing platforms or only a few?
You might observe that your competitors use printed materials, social proof, and flyers in their marketing strategy. You can test out all the methods they use and determine which works best for your business.
The observations you make about your competition will help you set your marketing budget properly. You can research or come up with other methods that could make your business stand out more over others. Marketing experts can help you with these. You do not have to copy your competition, and you certainly want to rise above them.
These are the steps you must consider in setting a marketing budget for your business. Remember that your customers will keep your business alive which is why you must listen to them.