How to build a better marketing budget
Marketing is an investment into the future of your business. But, with economic uncertainty continuing to challenge businesses, it's time to take a fresh look at your business's marketing budget to identify efficiencies and help with your planning for next year. Here are three ways that you can look at your budget differently.
Evaluate your fixed costs
Your fixed marketing costs are those that are tied to your marketing team's total compensation and the resources they need to do their jobs.
If you are looking to add to staff this year be sure to consider their entire compensation. Just like if you were adding a vehicle to your fleet of delivery trucks, you'd consider the pros and cons of buying vs. leasing the vehicle. The same is true for hiring. Could you get the same, or better, results by outsourcing some of the project work to consultants or an agency, and then using the left over money for advertising costs?
Software and subscriptions are big parts of your marketing team's toolbox. They use them to create digital content and deploy it at the right time. Could you use new features from your current vendors to find other efficiencies (i.e., replace one vendor entirely or transition printed materials to digital content)?
Revisit your goals for this year
What were your goals for this year? What marketing activities helped you achieve those goals? If those activities are still relevant to your upcoming goals, then I'd recommend reinvesting in them. Don't forget to keep an eye on these ongoing results. If things dip, then consider making adjustments so that you can stay on track with your goals.
For the activities that didn't work this year, what did you learn? How can you apply those learnings to future marketing projects so that those investments have a better chance of success.
Plan to test and grow
Now that you've reviewed and accounted for your existing marketing activities, it's time to brainstorm for what you want to invest into innovation and growth. What are your SMART goals? Are there new marketing mediums (i.e., short-form video, automated Emails, etc.) that your team wants to explore? What key messages do you want to try to elevate in a new way? Are you rolling out a new product or service? Is there a new way that you can package your existing products and services so that they are new to your customers and still add value?
Whenever you try something new, it's good practice to test it on a smaller scale, review the results, make adjustments, and when it's performing well, then you put more money behind it. For example, let's say you want to promote your new bundle of your existing products. An Email to your existing customers is free, so that's an easy tactic to add to your plan. You can also post about it on social media for free. But, if you want to advertise it on social media, start by testing the creative with a smaller subset (i.e., segment based on geography or demographics), then once you've found a creative social media ad that's working well you can expand it to include your full target audience. This way you save your advertising spend for when the creative is working.
If you're looking for an amount to start with for this new ad test, then I'd look to the profits you make for that product. What's your breakeven point? If you show the ad to 5,000 people on Facebook, and 5% click through your ad to your landing page, then how many would need to buy your product to cover the ad expenditure? To improve the chance of someone buying the product, make sure you treat every step as if it's a journey that the customer is going on. Think of what would grab their attention in the ad, what they would want to know on the landing page, and how to overcome any of their other objections.
If you want to pick our brains about your budget and plans for next year, we do offer hourly consultations at $100/hour. Simply, contact us and we'll reach out to you to set up some time to meet and discuss.