A successful marketing plan requires just that – planning. This extends to the marketing budget, the finances and the spending you’re looking to assign to all your marketing activities and endeavours. This dollar value will be different for every business.
While the final output will depend on various factors, marketing can truly cover everything from a website redesign (especially important for eCommerce businesses), all the way to street signage, sales campaigns and branding and design efforts.
It can be tempting to throw a lot of money at marketing in your early days to set yourself up “on the right foot”, but before you dive in, let’s take a look at some of the key considerations that will impact the finances of your marketing plan.
Your Brand
Something that will be covered in detail in your overall business plan, understanding the foundation of your brand is key to your success. Take a step back and look at what the first impression of your brand is. Are you well-known within the industry, with a name that speaks for itself? Perhaps your business is part of a larger franchise and you’re able to leverage their large marketing spend and efforts and utilise an existing brand name that elicits trust and good will with customers. Or perhaps you’re new to the scene and really wanting to get your name out there.
Review everything from your logo to how you speak about your business on all of your platforms and in print collateral – what does your brand represent, how does it make the customer feel? It’s all about how current and future customers will perceive you, and these answers you discover will inform your spend – perhaps you do need to heavily invest in a rebrand, or you might be able to utilise an existing strong reputation and reduce your marketing spend to specific, dedicated areas. It all comes down to your ROI (return on investment), but this doesn’t always have to be measured in standard metrics – a smart spend will enhance your other marketing efforts and work smarter, not harder, to share your product or service.
Share Your Message
If you’re promoting your business, you’re advertising/marketing it, so make sure you add everything from social media strategies and efforts, SEO, paid Google ads, email campaigns and even things like TV or radio spots into the finances of your marketing budget. Of course, every business owner wants to think big, but customers today don’t always respond to the flashiest marketing efforts – it’s about being creative, which is why it’s so important to have the right marketing team behind you.
Getting Down to the Dollars
It’s wise to consider having two sides of the finances in mind – one that maintains what you’ve already got going and know what works (this will assist you to sustain your revenue and ensure you keep the operational wheels turning and money coming in the door). The second will be more of a “push” budget for marketing – this might be a specific percentage of sales which you directly allocate to marketing efforts to enable growth. This could be anywhere between $300 and $1500 a month – of course, you’ll find marketing agencies out there with a large up front spend and retainer, but consider if paying more for someone else to manage and monitor will enable you to work on other key areas of the business.
You should have a rough idea of what it costs you to acquire just one new customer, this might be the cost of a lead for example – which means adding up all the costs involved in marketing and branding and divide that by the number of new customers who have converted into sales during a specific period. All businesses want to strive for the lowest cost of acquisition possible, but be realistic especially if your business is new, and look to acquire those high value customers that keep coming back!
The finances of your marketing efforts are important, and it’s key to continue tracking and recording your efforts monthly, quarterly and yearly as your business grows, especially when the time comes to get your business sale ready. If you’re not being seen, heard and talked about, you won’t generate the revenue you need to thrive, but the positive here is that there are so many more ways today to share your message and your brand, and they don’t all cost an arm and a leg.
Next time in this series, we’ll look at monitoring and measuring your marketing metrics, and ensuring you’re correctly tracking your progress.
