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To gain maximum engagement between the public and your brand, it takes more than a sign on your storefront and word of mouth. Strategically marketing your small business across all platforms is key. Branding is a necessary part of succeeding in business, however, it’s probably outside the realm of what you personally have time to handle.
You realize you need to include marketing within your annual budget, and for that reason, it's a good idea to consult with a media partner that you trust. Working with someone who has done the research and specializes in ad placement translates to better results for your campaign.
But how much should you spend on marketing your small business for the best return on investment? Let's talk about how you can set a realistic marketing budget that gets results.
Your Small Business Metrics
The first step to developing a sound marketing budget is to calculate the fitness of your business. What is your average sale? What is your net profit? What do you feel comfortable spending, and what do you expect in terms of ROI?
Start thinking of marketing as a necessary expenditure. Avoid basing your marketing budget on what's left over after other bills are covered, because consistency is key. Your media partner will help you determine how much you can spend and how to best spend it.
Your Marketing Goals
Now look at your business objectives. Where would you like to be revenue-wise as opposed to where you are right now? That difference reflects the basis of your goal.
Your goal may be to build brand awareness, generate a high volume of qualified leads, establish thought leadership, or increase brand engagement.
Marketers who set goals are 376% more likely to see success. Setting SMART goals helps to keep your marketing strategy on track. To meet your goals, you know that you'll have to spend at least some money to increase your reach. Your marketing budget should be considered an investment, not a cost.
The Importance of Setting a Marketing Budget
Deciding in advance on what you want to spend in terms of marketing makes your campaign planning process easier.
Determine what's needed to break even on your marketing investment and see ROI on a campaign. Based on net profit, you can set a percentage of what you want to spend on marketing. Generally, small businesses with revenue below $5 million allocate 7-8% of their income toward marketing.
Remember, you can't get results if you don't market your business. Setting a budget makes the possibility of consistent conversions more likely.
What to Include in Your Marketing Budget
Essential activities to include in your marketing budget include:
Marketing Communications
- Content
- Video and print catalogs, brochures, and flyers
Paid Advertising
- Television commercials
- Social media ads
- OTT ads
Technology
- Website development and maintenance
- SEO
- Web analytics and marketing automation tools
As your business grows, your marketing needs will change. A good marketing budget evolves over the life of a business and should be reevaluated annually.
Understanding Trends
It's important to educate oneself about current and future trends to know where to invest your marketing efforts and what you can expect in terms of ROI. Email continues to be effective when it comes to both cost and reach. Video is, and will be for the foreseeable future, one of the most popular ways to connect with your target audience based mostly on the ease of engagement.
A good media partner is not only well-versed in trends, but is also insightful when it comes to market projections. Your partner will stay on top of what's working and what's not, so that adjustments can be made accordingly without the risk of going over budget.
The Importance of Hiring a Media Partner
Both you and your media partner should work together to set your marketing goals and create a plan. Once you’ve identified your goals, set your marketing budget, and projected sales trends, your media partner can also help you with creative ways to reach your target audience and achieve your desired results.
