How Much Should I Spend on Marketing?
Almost every client we have asks
this universal question!
To understand the recommendation, first, let's define the term "marketing budget."
Your marketing budget refers to all costs for marketing, advertising, public relations, promotions, printing and anything else you might blanket under that very wide-cast net called 'marketing' on a day-to-day basis. For example: Google My Business, Paid Search, Digital Advertising, Printed Collateral, Social Media Management, Sponsorships, Special Events, etc.
Without a proper marketing plan and foundation, your day-to-day and annual marketing activities will range and suffer, usually leading to "snap" decisions, bad decisions, overspending or even worse - underspending, leaving you frustrated.
1). Review your annual gross revenue and decide on a number that you're comfortable with. The national average for a new business to make a big splash would be 12-20% of anticipated gross revenue. For establish companies with a desire to grow, look to spend between 6-12% of your annual gross revenue. This can be based on the prior 12 months or anticipated gross revenue for the forecasted year ahead.
2). Set goals and measurables to determine what is really working and what needs to be thrown out. Setting digital goals is the most overlooked area of any business plan, so if you're not sure where to start or even what your options are, then let's talk! firstname.lastname@example.org
3). Look for areas of weakness that could cost a customer: IE: The "customer journey." You might have the most beautiful advertisement or video in the world, but if it leads to a really poor landing page or area that has nothing to do with the promotion, you are almost guaranteed to see drop-off from that customer. Does your advertisement have proper planning from first introducing yourself to a potential customer or patient and then all the way through acquisition.
4). Another key metric should be your LTV (lifetime customer value). What is your business truly profiting off the acquisition of a new customer? How does that stack up to your cost per lead?
In closing, be truthful with yourself and your priorities. The easiest thing for any of us is to quietly convince ourselves of little half-truths! The exciting thing looking towards 2020 is that when managed properly, your marketing spend will return its weight in gold everytime!
NEW COMPANIES: Total marketing budget should be 12-20% of Gross Revenue.
ESTABLISHED COMPANIES: 6-12% of Gross Revenue for continued growth.2020 FOCUS AREAS FOR YOUR MARKETING:
- CUSTOMER EVENTS
- BLOG / EDUCATION
- SEO (search engine optimization for organic search results)
- SEM (search engine marketing for paid results)
- DIRECTORIES * The most overlooked area for most businesses!
- GOOGLE MY BUSINESS
- EMAIL MARKETING
- SOCIAL MEDIA
- SOCIAL MEDIA ADS
- TV // YOUTUBE ADS
- TRADE SHOWS
- AWARDS // NOMINATIONS
- GRAPHIC DESIGN
- REPUTATION MANAGEMENT