January 23, 2020
We can’t all be blessed with endless pockets like the Kardashians. Unfortunately, some of us must learn how to budget our money and try to save wherever we can. Sometimes that shiny new product we’ve been eyeing and had in our cart for the longest time, we have to put aside in interest of feeding ourselves or paying the bills. When it comes to making and sticking to a marketing budget for your small business, the same rules apply. Cutting costs that you don’t need or figuring out how to shift around your resources in order to better market your product or services is crucial in order to help keep your company successful and relevant. Today we’re going to dive straight into creating that kicka** budget, and how to ball on it, all year long. Here’s your 5 step guide in developing a marketing budget.
Listen, we all know that one annoying friend whose mindset is always “go with the flow, I don’t need a plan”, and it annoys everyone because it’s not 1970, we aren’t hippie children, and also we’re grown adults with schedules and places to be. Let’s call them Sam. DON’T be Sam with your marketing budget! You need to plan, plan, plan. Know your marketing strategy. By strategy, we mean this:
For those of you who ever took an intro to marketing or advertising class, this “funnel” is awfully familiar (we’re sorry if it brings back any trauma of studying until 3 am and surviving off red bull alone- or maybe that’s just us). The sales funnel looks like this:
(picture courtesy of : https://www.mailmunch.com/ )
Depending on what you google in terms of sales funnel, some graphics are simple like this with four steps, some have five, or even six, and some have WAY more detail. But for the purpose of this blog, we’re going to stick with simple. Essentially, from top to bottom, you need to know how you’re consumers are discovering you, what they need to know about you, your product, or your service before they consider a purchase, and then the factors that contribute to their final purchase with you. Knowing how they get from curious about you to having you in their shopping cart helps big time with figuring out what you need to do in your marketing budget to better market to your consumer.
This step is short, but it’s part of the overall plan: what stage is your business in? Do you need quick spikes from your marketing, or can you afford to plan long term for growth? Quick spikes are often good for those in a growth or beginner stage, and long term works well for those who are more established and in a planning stage.
We don’t mean your read receipts- we mean those bank account receipts. In order to know how much you can spend, you should probably take a look at what you’re already spending. And then you need to see how much you’re bringing in to plan what else you can spend on (we’ll touch on that in a second). Make a spreadsheet or write out a table with all the costs of things you already spend on, and then anticipated costs for the future. This will help you get a better overall view of what your marketing budget looks like or should look like.
Now, you should never approach your marketing budget with a “this is what we have after x, y, and z” mindset. Seriously, marketing should never be the equivalent of Chinese takeout leftovers in your fridge. Whatever your overall budget is for your business, your marketing budget needs to be relevant. According to a great write up on budgets (head over here to read it) by Medium Marketing, businesses that have less than $5 million in revenue need to expect to spend at least 7-8% of that on marketing. The goal here is to establish yourself in the marketing place, not go undetected. This is why brand development for a new business is CRUCIAL, as well as first time promoting to get your name out there.
Once you’ve figured it all out, we find it best to have an overall budget for a year, and then break it down by month. We say months usually because certain marketing tools come as a monthly subscription as a cheaper option than just buying a yearly subscription straight out of the gate. Splitting it up also makes it less daunting and more manageable for you.
However, if you’re looking to outsource so you don’t have to keep track of all these things, your budget needs to be more about what can you afford to spend on a marketing team. What you can afford will greatly determine what your outsourced team can do for you, so always make sure you schedule a consultation with a team first and get the numbers straight up, before committing to something you can’t afford. Most agencies have set base prices for any of their services, so do your research as well!
Depending on what graphic you look at, some are simple like this with four steps, some have five, or even six, and some have WAY more detail. But for the purpose of this blog, we’re going to stick with simple. Essentially, from top to bottom, you need to know how you’re consumers are discovering you, what they need to know about you, your product, or your service before they consider a purchase, and then the factors that contribute to their final purchase with you. Knowing how they get from curious about you to have you in their shopping cart helps big time with figuring out what you need to do in your marketing budget to better market to your consumer.
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