The new year will be here before we know it. Does your marketing budget have you set for a successful year of growth?
For some, it might feel like it’s still a bit too early to start planning for next year. But the truth is, with the busy holiday season coming up fast, now is the perfect time to get ahead. Here’s our advice for proactively planning and setting a healthy, but realistic marketing budget in advance…
Your marketing budget is an investment.
The old saying, “you have to spend money to make money” still rings true today. Many people don’t realize that marketing is an investment in your brand. Meaning, when done right, there should be a pay-off.
Whether you’re the CMO of a Fortune 500 company or the owner of a small mom-and-pop business, the right marketing plan and budget can help produce a higher ROI and spark new growth for your brand. The only exception to this need for marketing occurs when consumers need your product or service on a consistent basis (think medicine or insurance). And even then, the only way to get them to choose you over a competitor who does invest in marketing is by a) being a monopoly or b) offering exclusive, unique value.
Once you fully understand the power of effective marketing, you’ll have a better understanding of what to spend throughout the year to achieve your goals.
“How much should we spend on marketing?”
That’s the big question, and every brand in every industry wants to know the answer. Unfortunately, there is no simple answer for determining how much to spend on marketing and where to allocate those dollars.
According to a 2022 Forbes article on how much you should spend on marketing, “if you want to maintain current revenue amounts, then 5% to 10% of sales allocated toward advertising may suffice. If you want rapid growth, then you may need to push that number higher, possibly to 20% or more depending on the industry and type of business you operate.”
But again, this isn’t a one-size-fits-all situation, so those numbers aren’t a silver bullet. How you allocate your marketing dollars is just as important as how much you spend.
Below are a few strategies you can use to simplify the process and determine a budget that’s feasible, yet effective in taking your business to the next level…
- Determine what others in your industry are spending.
Being aware of what others are spending in your industry is critical in achieving your goals without overspending. Make sure you and your team allocate adequate time to market research before landing on any figures. If you’re not sure where to start in the research process, a full-service agency like Asen can always take it off your plate.
- Think about how to best allocate your marketing dollars.
You can always amp up your marketing, but it’s never good to pull back. Start with your priority “action items” and build your budget from there. If it’s essential to your business, such as the development of a logo or employee training materials, make sure to allocate time and budget to it. Then, consider additional marketing strategies that will pay off in the long run, such as digital advertising, trade promotions, or direct sales. Channels like these produce a high return when utilized effectively, so you’ll want to find your sweet spot between spending the bare minimum and overspending.
- Get an expert opinion (or two).
Here’s the thing about marketing partners… they’re just that—partners. As in any industry, a good partner will serve as an extension of your internal team. Getting an experienced marketing agency or partner to review your budget and provide proven insight or data that can help maximize those dollars can be a game-changer. With an agency, you can even get access to feedback from multiple long-time marketers.
Long-term success starts here.
That’s the goal! And with the right marketing partner on your side, you can fine-tune your budget to ensure you’re getting the most out of every dollar spent.
At Asen, we only recommend strategic, results-driven services with the highest probability of helping our partners reach new heights. It’s our job to work backwards within set budgets by prioritizing marketing efforts that will bring our partners the most return, the fastest.
Though we also provide “perfect world” budget scenarios, we understand it takes time to grow a brand and we’re happy to work within a budget that’s healthy for you at the moment. Ready to get started? Let’s chat!