Tips for Creating a Marketing Budget That Gets Results
Have you ever heard that “Idea is nothing without execution”? We couldn’t agree more. No matter what kind of business idea you have, if you stay off customers’ radar, you won’t be able to scale it. This is where marketing comes in. Without marketing, it’s almost impossible to grow and sustain a business. Unfortunately, marketing is expensive. If you want to run Google ads, start Facebook campaigns, collaborate with influencers, you need a carefully planned marketing budget. In other words, you need money to acquire customers and improve conversion rates. So, when you have specific business and marketing goals, you need to carefully calculate and allocate your marketing budget. We asked marketing experts to share their tips on creating and organizing marketing budgets so it fits your small business’ size, niche and type of services.
Corina Onet – Owner at Chef’s Pencil
You need to start with the end goal in mind and clearly define and prioritize your top goal(s). Do you want sales, leads, traffic to your site, or to increase your brand awareness? All these require different strategies, marketing channels, and budgets.
If the sale is your top priority, your next step is to define your success metric(s). These can be a number of sales, volume or anything in between. Then think good about what type of marketing strategy, platform and budget will bring you closer to realize your goals and be realistic about it.
If your marketing needs to bring in 100 online sales every month and the cost of acquisition is $150 per client, then budget accordingly and don’t just expect magic to happen.
Also make sure to ignore any distractions, even if they have a positive impact on your business. If your goal is sales then brand awareness campaigns might help a bit, but rather in the long run, so make sure to focus on what’s most important to your business.
Shaan Patel – Founder and CEO of Prep Expert
What we’ve found to be our most successful content strategy is developing and launching tailored webinars to draw in prospective students and parents. Our primary webinar shares specific test-taking tips, advice on applying to colleges, and help in securing scholarship money.
By offering various subject threads in the presentation, we are then able to deploy an array of focused Facebook and Google Ads to highly targeted market segments, all pushing people to sign-up for the webinar.
Because our market is quite specialized, competition between the top companies is fierce, but we’ve seen consistent returns on this strategy in the nearly three years we’ve been using it.
This funnel provides consistent, real-world value to visitors and provides a strong cornerstone to help focus our blog, email marketing, and social media channels. Moreover, we have immediate lead generation captures, which we convert into email subscribers and see immediate sale conversions from an offer we provide.
All of that is managed by our EverWebinar platform account, which for a straightforward subscription, manages most of the heavy lifting for this marketing funnel.
Polly Kay – Senior Marketing Manager at English Blinds
Setting the right marketing budget means determining the various different elements of the budget and broadly how they will be used, rather than just allocating a lump sum to “marketing” as a whole and hoping for the best.
Naturally, nobody in the C-suite will wish to overspend on any type of budget, but it is much more perilous to underspend, particularly when it comes to marketing and promotions. Whilst, not every campaign will succeed or produce the projected yield, the ROI of any marketing budget should be scalable, and so the more money put into it, the higher the ROI should be, and this should correlate exponentially in meaningful terms.
With this in mind, reviewing the ROI of past campaigns and budgets can help to determine the appropriate one for any new endeavor. What sort of figures funded an approach that returned an impressive ROI, and how? Perhaps consider adding a little more to the pot in this case to maximize yield.
Identify also points where an increase in budgets topped out, and the point at which the ROI’s multiples leveled off and failed to increase further; providing a viable area to reduce the budget.
Finally, to assess the success of any campaign and so the effectiveness of its budget, you need to build in metrics to measure this from the outset. Campaigns need a goal, a target, and a way to measure them; otherwise, you will never be able to judge their success and in turn, the appropriateness of their budget.
CJ Xia – VP of Marketing & Sales at Boster Biological Technology
Allocate 80% of your budget for 20% of services that are giving 80% of revenue. I recommend businesses to stop marketing equally all their products or services. The bitter truth is not all the services or products bring revenue to our table. In the same way, we should not spend much on them. Contrarily, the budget should be allocated for the business area, which is already working well. I mean that you readily have the required skills and staff for a running product. You do not have to spend an additional amount for rehiring or making your products or services better. In this scenario, more marketing for that 20% of products only means getting more customers without bearing additional costs.
Anh Trinh – Managing Editor of GeekWithLaptop
One tip to ensure that you don’t lose money by allocating a marketing budget is to use a percentage of your revenue as the budget. This works really well for me since I am running a small business.
I figured this out when my accountant suggested that a fixed amount is a bad idea since we didn’t have enough money to maintain the ideal budget for marketing and promotion. If you’re wondering, I allocate 10% of our revenue on marketing.
Another tip I can give is to use online services to your advantage. There are tons of budgeting calculators online and I suggest you use one of them. I personally use the marketing budget calculator by Hook Agency.
I don’t advise that you follow the results blindly but it will give you an idea of how much money you can spend on marketing.
Brian Robben – CEO of Robben Media
Want to create an effective marketing budget? Don’t fail to know your customers and where they frequent — expensive marketing is when you throw spaghetti at the wall hoping something sticks. Don’t play it so safe that you never market and hope business magically comes to you — the biggest risk is when no one knows your business and doesn’t buy from you.
Instead, do these two things. First, know who your customers are, where they go to find solutions to their needs, and then run a digital ad with a strong offer to win their business. For example, an immigrant who is seeking a green card would Google search “immigration lawyer” and find a list of local immigration lawyers. With this in mind, it’s a smart idea to run a Google ad to show up first for this search. It’d be a bad idea to run Instagram ads in this case. We’re running Google ads for an immigration lawyer and producing insane results because we understand their target audience, and where they go for solutions. Mimic the principles of this approach in your business.
Second, when you find a digital advertising campaign that works, you’d reasonably want to spend as much as possible on it, right? If you make $3 for every $1 spent on advertising, shouldn’t you forget about a budget and try to spend as much as reasonably possible on marketing? To do this with confidence, you need to know your numbers, including customer lifetime value, average profit per customer, return on advertising spend, etc. Then invest as much as possible because it’s not a risk anymore. It’s a statistical certainty based on your data.
Brendan McConnell – Content Consultant at Premium SEO NZ
Creating a marketing budget requires you to think holistically from both a resource and a tactical perspective.
Generally speaking, I like to take a look back at the previous year to identify which tactics worked well and created benefits that aligned with the organization’s strategic goals. For example, if you piloted one or two new lead generation projects that performed well, then you’ll likely want to allocate more budget to those activities in the future. Likewise, if specific tactics under-performed, then you should reduce or remove the budget from those activities. The goal here is to have a clear understanding of your company’s strategic goals, how your marketing team fits into that equation and the tactics that will help get you where you need to be. That requires both strategic thinking, and analysis of past performance.
Once your priority tactics are established, you should take stock of the resources that you’ll need to execute on your plan. These might be staffing resources, freelancers, marketing tech, advertising costs, event fees, and so on. Plan each of your tactics and strategies from a full-year perspective, and reverse engineer the resources and funds you’ll need to be successful.
Of course, no amount of planning will be 100% perfect. There will always be surprises and pivots throughout the year. To address these, it’s always good to squirrel away some money to act as a buffer, enabling you to react to strategic and market changes at any time.
Dustin Vann – Owner & CEO at Trusy Social
Unlike with your children, with marketing budgets, you are allowed, and it is essential – to pick a favorite.
Marketing budgets are limited, especially in small businesses, and many make the mistake of spreading the budget across all the channels.
Marketing companies that create content and social media videos make the mistake of spending more on the creation of the content, with little money left to promote it. We use a 3:1 ratio, spending 3 times as much promoting it as it was to produce it.
What’s the point of having the best video, article, product if nobody gets to hear about it or see It. Section your budget for 25% making it, 75% promoting it.
Jennifer Willy – Editor at Etia.com
Every marketing strategy needs a certain amount of budget to perform. Many companies plan their marketing budget based on the previous year and how much they’re willing to spend on marketing. If you are new to the business and want to launch a marketing plan, spending your money appropriately is very important. Below are some tips regarding the marketing budget.
Before you calculate your marketing budget, align your marketing goals with your company’s strategic goals and vision for growth. It’s important to develop a written marketing strategy that your executive team, sales team, and marketing team are on board with. Allocating your marketing budget in dollars is important. Other things that should be considered include SEO and paid advertising, social media, content, blogging and email marketing, traditional advertising, etc. You also have to determine how much of your marketing budget should be allocated to each aspect of your plan.
Michael Carr – Digital Marketing Specialist at Software Path
It’s important to leave flexibility within your budget. There may be situations whereby an increase or decrease in marketing spend is either necessary or possible. For example, capacity within a business to fulfill sales orders may dictate that you need an increase or decrease in lead volume. This may lead to situations whereby you must reduce, or increase spending quickly in order to satisfy business demand. Alternatively, sudden market changes may present an opportunity for a quick win or may expose a potential risk. Having the flexibility to increase your spending can provide you with the capacity to take advantage of these changes. In essence, having maneuverability within your budget provides the flexibility to be dynamic and react when situations that require adaptability arrive. This is why we always try and maintain a 5% surplus in spend compared to the budget.
Let’s Wrap It Up!
When working on a marketing budget, you should be flexible, plan in advance and keep vision on growth. Use your money to promote the content, pay attention to where your customers spend their time online and prepare for dynamic changes in the marketing field.
We hope this article was helpful. If you liked it, feel free to check out some of these articles as well!