You’ve heard it before, and we’ve said it before: You have to spend money to make money. But one of the biggest struggles we see from our clients is figuring out exactly where to spend their money to get the highest returns.
Properly allocating your marketing budget can be crucial for seeing growth within your organisation. Without the right budget you may not be able to appropriately execute the marketing strategies and tactics that you need to attract and retain customers and clients. Or putting it another way, drive revenue.
When developing your marketing, make sure you are viewing marketing and sales as an investment, not an expense. As such, investments are predicated on their returns.
However, with the number of marketing areas you could invest in, it can be difficult to know what the right strategies are. To help you identify where your marketing budget could best be used, here are a few tips based on our experience.
1. Set your goals
As you enter the new year, think about what your marketing and overall business goals are. The direction you want to move will influence where you should consider investing your money.
If you are just getting your business off the ground it makes sense to focus the majority of your marketing budget on attracting and converting new leads. Your main priority should be building a customer base. However, as you become more established, those goals will change. You still need to focus on attracting new leads, but you also need to allocate some of your budget to retaining the clients you already have.
Before you start deciding where to spend your marketing budget, identify your priorities and what you’d like to accomplish. This should help you decide where to spend your money.
2. Find the right marketing avenues
The next step is deciding which avenues are the most deserving of your budget. This is where things can get tricky. Your marketing budget is like a pavlova at Christmas, and each of your strategies is a hungry family member. Each person might easily consume the entire pav if you let them, but you want to make sure each of them gets a share. I mean it’s a pav, who doesn’t want some of that!
However, you shouldn’t just divide your marketing budget equally. Instead, consider which strategies can bring the highest return on that investment and bring you closer to reaching your goals.
Reducing customer churn and taking care of your customers is becoming more important than ever. Acquiring new customers costs more than nurturing your existing customers, so when you create your marketing budget make sure your focus is on both engaging existing customers and attracting new ones.
Here are a few areas to consider when determining where to allocate your 2019 marketing budget.
While marketing software, content marketing and SEO are only fractions of your marketing strategy, it’s important that they’re well supported within your budget. When you’re using the right software, you have strong content and your website is properly maintained, then social media strategies, email campaigns and paid advertisements can bring higher returns.
Don’t forget to incorporate the human resource costs into your budget too. It’s all well and good to spend money on technology and tools but they won’t run themselves – whether those resources are internal to your business or external (contractors, consultants, agencies) include it in your budget – it will make the ROI (return on investment) evaluation more accurate and determine the skills you require to deliver outcomes.
3. Monitor your budget and adjust if needed
It’s not uncommon to create a budget and find that it just doesn’t work. Problems can arise, plans may become obsolete or you may meet your goals sooner than you expected.
If you find that your proposed marketing budget just isn’t getting the returns you hoped for or that you need to move some of your funds around, don’t hold back on making adjustments. While you want to stay within budget as much as possible, be flexible enough to continue moving toward your goals. Sometimes hard decisions need to be made to ensure you set yourself up for future growth and success.
Staying current on what is important to your customers and what keeps them loyal should drive all budget decision factors.
Properly allocating and spending your marketing budget is important for growing your company, but we have found that it’s better to treat your budget as an outline rather than a set-in-stone plan. Keep your goals top of mind throughout your planning process and do what you think is best for attracting and retaining your customers to ensure revenue growth.
Keen to learn more and grow your business through better marketing? Come and join our Marketing Fundamentals course designed for small and medium businesses. The first course starts on 26 February and places are limited.