Setting a budget for marketing is the key to a successful business strategy.
Yes. This is still true despite being in a recession.
It would be best if you didn’t completely cut off your marketing efforts. Harvard Business Review found that businesses that choose to keep their marketing budget even in trying times perform better than those who don’t.
By having a clear image of your fund allocation, you can make sure that the business is only spending for the essentials. It allows you to solidify your goals and prevent you from going over. Knowing how much you can spend will also help you manage your expectations and objectives.
You do not want to run out of funds midway through a campaign and wonder where your annual budget went.
Plus, this will also guarantee that the business can hold up to its commitments and partnerships. You can use this as a guide for your responsibilities and become a more credible partner.
Businesses are bound to encounter blunders as they learn how to make a marketing budget, but there are some hiccups that you can avoid. Learn the common marketing fumbles that marketers often make.
Let’s review what you need to know about setting a marketing budget.
Take a look at the quick refresher below:
- Evaluate your sales funnel – Find out if there are any leaks in the process and know which one you should prioritize. Should you find issues, make sure that you create a plan to fix this ad allocate the funding for it when necessary. The sooner you solve what’s hurting your conversions, the better.
- Set goals – What do you want your business to achieve? Asking yourself this question will let you determine what part of your operations need the most attention. For example, you may want to drive sales, engage more audience or even build brand awareness. You want to take time to evaluate your priorities to determine your brand goals successfully.
- Take a look at your spending – You always need to factor in your non-negotiable expenses before allocating your money to other things. This part of your budget includes your rent and payroll. Don’t forget about the variable expenses. This is the type of expense that may change over a period of time. Understanding how this cost fluctuates lets you understand your operations more and create a bulletproof strategy.
- Know your audience – For any part of your job, you always want to know who you are speaking to. Doing this gives you a better idea of how you can reach and communicate with your target audience. You want to understand buyer personas and what you need to do to make them notice you.
Common Mistakes That You Have To Avoid
When it comes to setting a budget, the rule of thumb is setting aside 7% of your sales revenue. It is recommended by the U.S. Small Business Administration (SBA) for small businesses raking in less than $5 million.
Practicing this is an excellent place to start. But that doesn’t mean that you will be invulnerable to slipping every one in a while.
Here are some of the usual marketing mistakes that you can avoid by being more aware of them today.
Recycling the Same Plan as Last Year
Copying and pasting your plan last year is a big no-no.
What worked for your brand in the previous year may not be the right budget for you this year. You can always improve upon your past budget that will best fit the state of your business in the present day. In your next plan, make sure to consider the market and sales changes that occurred in the past 12 months. It will help you draw a project that is particular to the market as it is today.
Not Making the Most Out of Free Tools
There are a lot of fancy-schmancy marketing tools out there that seem irresistible. They promise different advantages and shiny advancements that will drastically improve your campaign. A part of this is correct, but many marketers get too caught up in buying and subscribing to tools they don’t have the strategy for. As a result, they end up not maximizing the device and not getting their money’s worth.
That’s why it’s best to explore different free marketing tools first before deciding to commit to them fully. Grabbing the chance for a free trial will guide you to making a better purchase decision.
On a similar note, it is also best for you to choose tools that will serve you more than a single purpose. You can opt for tools that serve different purposes. For example, you can use a logo maker like BrandCrowd that also offers different designs for other brand collaterals such as brochures and invoices.
Taking Your Current Customers for Granted
Growing your customer base is at the top of the priority list for young companies. However, you don’t want to leave existing customers out of the picture in the process. This alienates your customer pool and urges you to spend more because studies have shown that acquisition is more expensive than retention.
You want to put effort into deploying campaigns that will encourage them to repeat business with you. Start engaging your current customers better through loyalty programs or be as simple as giving them a shoutout on social media.
Not Having Clear Goals
Businesses are driven by different objectives. Some companies aim to fix a leaky sales funnel or increase web traffic, while some even want to have a more substantial share of voice. Before you set out to allocate your marketing fund, you should begin doing so by establishing goals.
Objectives guide your team to allocate tasks and money appropriately. Putting your objectives into mind will lessen the likelihood of you overlooking any projects. Additionally, you can use it to ensure that your marketing targets are aligned with your business goals.
Not Running It Over To the Sales Team
It is crucial to keep an open line with sales when it comes to the fund your campaign requires. Getting the approval of your sales team gives you more assurance that your budget is feasible and sustainable with your company’s current state. Coordinating with sales helps you have a clearer vision of what the expense should achieve.
Subsequently, it would be best to work with the sales team to see how your project has affected the sales, whether it be for better or worse.
Not Checking on Your Campaign’s Performance
Your strategy should always be up to scrutiny. It is a part of the process to see if you are effectively using your tools and if you are hitting your key performance indicators. By staying on top of your analytics, you become more aware of each shift in your business and respond accordingly.
After launching any project, you want to check on how it is performing to determine if it is worth your precious marketing fund. Checking on campaign analytics should be done as often as you can. This way, you’ll have an idea of trends and seasonal movements in your business. You don’t want to craft campaigns backed by outdated business data.
The fewer rough patches you go through, the faster you’ll make your way to the top. It is vital for new companies, especially startups, to take an aggressive approach to marketing. This is what will help you become more visible and credible in your industry.
Always remember that marketing is not supposed to be overly complicated or expensive. This article has shed light on budgeting mishaps that you need to be aware of to avoid them and get closer to becoming a marketing rockstar.
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