The idea of having a budget for marketing may seem unattainable for start-ups, and even for many existing small businesses. But becoming known in the marketplace is not something to leave to chance. The good news today is, with experienced guidance marketing experimentation can be very cost-effective and approachable.
There is no magic formula for arriving at a dollar amount for your budget, but somewhere between 2% to 10% of gross revenue is typical for most industries. Start with the last 12 month’s revenue and include the numbers from your future sales goals to establish a short-term budget that will enable you to reach your target. When you decide on that number, know that it has to be flexible. Then carefully make your decisions based on effectiveness for real value added.
Next, measure everything. Especially when the budget is small, you will want to have as much knowledge as possible before making spending decisions. It takes time, but the more you know about measurement, the more informed your decisions will be. Every dollar you allocate has to have a specific purpose. Then, knowing how to check your expenditures for effectiveness is crucial. It will allow you to adjust your tactics quickly before spending too much on the wrong tool. Put quantitative measurements in place in order to help prioritize those designated dollars.
Marketing budgets can be used on a variety of things, like speaking engagements, sponsorships, advertising and promotion. Once you figure out how to measure success, you’ll be able to see which of these is most successful for your business. If you’re not sure how to start, try inviting sales and customer service staff who know the target audience intimately to offer their opinions as to prioritizing your marketing efforts.
It’s not always easy to draw a straight line from marketing efforts to the revenue they generate, but it’s important to measure it where you can. Business-to-business firms might track new leads, while business-to-consumer firms may want to measure new customers.
Establishing marketing measures that matter to you company lets you track critical information that will help you with your marketing decisions, especially knowing when to adjust your tactics. Your marketing decisions will now be driven by metrics, keeping your spending directed and purpose driven.
Trembling Giant Marketing, LLC is your full service branding, marketing services, and public relations agency providing professional, affordable, and complete solutions to your business, no matter how large or small. Call us today for a free consultation.
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