How-To: Build a Thoughtful Marketing Budget
Ready to build your marketing budget but not sure where to start? Establishing a strong marketing strategy that boosts your brand and propels your business starts by synchronizing your goals with your marketing budget. Check out our tips to help kickstart this process.
Set Guiding Goals
A wise psychologist by the name of Fitzhugh Dodson once said, “Without goals, and plans to reach them, you are like a ship that has set sail with no destination.” Aligning your marketing strategy and tactics with your business goals is essential for ensuring a sound investment. Every situation is different. For instance, for new businesses, building brand awareness is often as important (or even more so) than increasing sales or leads. Establish goals accordingly.
If you’re not sure where to focus your marketing efforts, it can be helpful to use a goal-setting template like SMART Goals. Each goal should be Specific, Measurable, Achievable, Relevant and Time-Bound. A strong marketing plan should include both short- and long-term goals that work together to grow your business.
Identify Your Audience
Another priority should be identifying your target audience or audiences for each established goal. You’ll want to learn as much information about these groups as possible, including demographics, geographic locations, socioeconomic data, and your ideal audience member’s unique personality. If you’d like to learn more about how to understand your audience, databox gives excellent examples to follow.
Unfortunately, there is no universal budgeting plan that can make any business succeed. Each business is unique, so take a look at a few budgeting strategies to find one that best aligns with your goals.
One of the most common techniques for calculating how much to spend on marketing is the revenue-based approach. Revenue-based budgets involve allocating a percentage of your projected revenue to marketing efforts. The Small Business Association recommends around 7-8%* for smaller businesses and around 6.5-8.5%* for more established organizations. You can adjust your spend along the way based on the success of your marketing plan.
Another method that many businesses use is competitor-based budgeting. This technique involves monitoring the activity of similar businesses and applying their budgeting strategy to your own marketing plan, often looking for opportunities to establish a higher budget and ‘out-market’ key competitors.
Regardless of what plan you use, there will no doubt be some trial and error involved. Always be on the lookout for new opportunities, monitor your campaigns closely, and don’t be afraid to discontinue or replace tactics that aren’t working.
Finding the Right Mix
Once you have settled on a comfortable budget for your marketing efforts, it’s time to decide what types of media best align with your goals. Consider where your audience is consuming media and meet them where they are. For B2B sales, your website may be the most important tool for building a strong reputation within an industry. When targeting younger audiences, focusing marketing dollars on digital advertising like paid search and boosted social media may be the most effective tactics. Again, it’s a good idea to stay in tune with competitor and peer marketing activities. Not only will this keep you up to date on their tactics, it may also help reveal other marketing opportunities that they have not considered.
Stick With It
Investing in a solid marketing plan can build a strong foundation for growth, but results aren’t always instant. Especially for new businesses, marketing efforts need time to develop to produce results. Goals like increasing brand awareness and trust don’t happen overnight, but are essential for ensuring long-term success.
Still have questions? Engaging a professional marketing partner can help you develop an effective plan and budget. Contact Reuben Rink today to learn how we can put our experience to work for your business.
* Percentage recommendations as reported by the U.S. Small Business Association.