Many companies think that simply setting aside enough money to spend on marketing will yield success, but this isn’t true! There are many factors to consider when allocating your marketing budget, including the size of your company, the type of product or service you offer, and the marketing channels you’re trying to get results through. To truly get the most bang for your buck and return on investment (ROI), you need to understand how these different factors can influence your spending and maximize its potential to help your business grow.
Choosing how to allocate your marketing budget can be one of the most difficult tasks when starting your own business, especially if you’re new to the field and have no idea where to begin. To make this process easier, look at how much profit you want to make and how large your company needs to be in order to support this profit. Then, figure out how much of your budget should go towards advertising, how much should go towards hiring salespeople or telemarketers, and how much you should put into other investments, such as more employees or new equipment.
Decide on who you want to target
If you already have an idea about who you want to target, then give yourself a pat on the back—you’re already a step ahead of most small business owners. It is crucial that you know who it is that you’re looking to attract before you can decide on how much of your budget will go toward their attention. If you are trying to appeal to many different people, then it might be hard to figure out where (and how) you should focus your efforts.
Decide on whether you want to aim high or low
Aiming high could lead to disappointing results, but aiming low could have disappointing results too. If you want to aim high with advertising or promotion, you should be careful not to bite off more than you can chew. You may end up spending a lot of money on a campaign that just doesn’t get as much traction as you’d hoped. Be cautious and do some research before committing too heavily in any one direction.
Decide on what percentage of your marketing budget should be spent online vs offline
Here’s a simple guide for deciding how much of your marketing budget should be spent online. Ask yourself: What percentage of my sales are generated online? If, on average, 20% of my sales are generated via e-commerce, then I should be spending roughly 20% of my overall marketing efforts (e.g., website development, SEO, etc.) on making sure my e-commerce site is strong and optimized.
Decide on which campaigns will produce the most ROI
To determine which campaigns will bring you the greatest return on investment, consider where most of your revenue comes from. If most of it is in-store sales, you’ll want to focus on local SEO and store location optimization. If you get 80% of your business through digital channels, however, you’ll want to focus more time and energy on pay-per-click advertising campaigns or boosting organic search results with content marketing.
Allocating your marketing budget can be tricky because there are lots of places you can spend it, but not all of them will give you the best return on investment (ROI). The trick is to find a balance between getting the word out about your product or service and also having enough money to keep things going while you try to grow your customer base. This guide will help you decide how much of your marketing budget to spend on each area and give you an idea of what kind of ROI you can expect from each option.