So many small businesses start off the business year with no idea of what the marketing budget is going to be for the following 12 months. It feels like most are hoping to spend nothing and every Euro spent is viewed as a loss.
For marketing to be effective, it needs to be seen as an investment, not as a cost centre or distress spend.
There is no hard and fast rule about how to calculate what your budget should be but it is important that you put some serious thought into how much you want to spend and how much you expect that budget to deliver.
Start with your business goals.
How much in sales do you aim to make in the next year? What about your 3 or 5 year revenue goals? A good marketing plan involves sales-focused marketing activities as well as brand building tactics – brand marketing this year is a long term investment which will translate into sales over time.
Examine your marketing funnel – what is needed at the top of the funnel in terms of brand and product awareness to deliver sales at the bottom? What are your average conversion rates?
It’s hard to find hard evidence of what other businesses spend – the MII Consumer Marketing Monitor survey in 2018 says that Irish businesses spend 8% of revenues on marketing, compared to 11% spent by our neighbours in the UK. According to an article in the Wall Street Journal based on research carried out by DeLoitte, US companies spend an average of 7.5% of total revenue on marketing.
When you have decided what your budget is and identified the best channels and activities to reach your goals, the next job is to monitor how your investment is performing on a regular basis and change tactics as needed.
To misquote the great sales trainer Dermot McConkey – if you think marketing is expensive, try not marketing!
The big risk of not actively attributing resources to your marketing efforts is the loss of opportunities for your business to grow.
If you need help to grow your business through marketing, send me a message at paula@ronanmarketing.ie
