No matter what type of business you have, you need to understand that you can only do so much with an amazing product or service. These can help you get loyal customers. What will help you get more people into supporting your up and coming business is marketing. So, how can finding the right marketing budget for your business help?
Marketing is one of the most crucial practices that a business should invest in. Small and big businesses can benefit from a good marketing campaign. Initiating one that’s even a bit effective can be tricky. If you want to make the most out of a marketing campaign, you need to be prepared to invest.
Marketing isn’t something you can do for free. Before you think about launching a campaign or asking pros like Constant Clicks to make a campaign for you, you need to answer one important question first: how much should you spend on a marketing campaign anyway?
The Cost of a Good Marketing Campaign
Before anything else, you need to determine what type of marketing campaign you are willing to do. In general, you can pick between traditional and digital marketing campaigns. While the choice is all up to you if you’re looking for cost-effective campaigns, it’s time to go digital.
Traditional vs. Digital Marketing Campaign
Traditional marketing involves standard marketing materials such as brochures, posters, print ads, radio ads, and TV ads. Not to say that these aren’t effective anymore, but most of these are more costly.
On the other hand, digital marketing offers you a more sustainable campaign and a larger reach of your audience. These involve practices like SEO, Google Ads, PPC marketing, social media marketing, influencer marketing, and email marketing, just to name a few.
Another upside to digital marketing is that you have more control over your budget. For instance, we’ve found that Google Ads is one of the best marketing tools for businesses on a budget because you have a better hand at setting the budget for it.
That being said, it’s now time to set a budget for your digital marketing. A big mistake you can make at the offset is thinking of this as “another expense” for your business. Change your mindset.
Marketing Campaigns are Investments
You are “investing” in a marketing campaign. You aren’t simply buying it. As with most investments, the main goal of your marketing campaign is to help you get your return on investment (ROI) as fast as possible. Another reason to invest is that you want to help your business grow as naturally as possible.
We’ve handled many marketing campaigns throughout the years, so when it comes to budgeting, trust us when we say that you’d want to invest as much as you can in marketing.
Make 10% of your revenue be the absolute minimum of your marketing budget. The rest of your funds should be focused on marketing. According to our research, companies that have been generous with their marketing funds receive tremendous growth.
A fairly easy way to look at the possible results of your marketing is by checking out how Google Ads work. On this platform, you can earn as much as $7 for every $1 you spend. Of course, this is achievable if you properly market your product or service using the platform.
Finding the Right Marketing Budget for Your Business
If you want an in-depth look at how your budget should go, there are three ways you can look at it.
Cost of Advertising
This method of determining your budget answers the question, how much does it cost to get a new customer? We’ve found that the best way to determine this is by using metrics such as average cost per click or CPC on platforms like Google Ads.
If you’re getting low CPC using a few dollars for specific target keywords for your Google Ads campaign, then this means you’ll have to increase your budget spending. Getting a CPC of around $5-$10 is a good sign that you are spending just the right amount for your marketing campaign.
Not many businesses use this as a means to measure the budget they need to have for their business because it only gives them a general look at the spending. Still, it’s a good way to measure your overall spending if budget restraints aren’t too tight for your marketing campaign.
Percentage of Revenue
This method is reserved for those who don’t want to put too much thought into their budget for a marketing campaign. As the name suggests, you’ll simply have to spend on your marketing depending on a certain percentage of your annual or monthly revenue.
If you want to ensure that you aren’t biting off more than you can chew, you should first deduct your operational costs from your revenue. From there, set aside around 30-50% of your revenue for marketing. It’s a steep price to pay, but the returns you’ll be getting are more than the financial kind.
The amount you spend should be dynamic. For instance, if your marketing efforts for November proved to be effective, then increase your budget for the next month. A successful marketing campaign means more revenue. More revenue means more budget for your marketing campaign.
Revenue per Customer
Chances are, you’re focused on getting as much of your investment back as possible. If you’re hoping to do this, then the best way to check your budget is by calculating revenue for customers. As compared to the other methods, this is focused mainly on your ROI.
A low amount of revenue per customer means that you’ll have to spend a bit more to see some substantial gains through marketing. A high revenue per customer means you’re spending just enough on your marketing campaign as well.
At first, you’ll want to establish a cost per acquisition or CPA goal. Measuring this will let you understand whether you’re about to see a return on your investment.
Keep in mind that your CPA will vary depending on the marketing channel that you are using. Some marketing campaigns cost more while some cost less. That being said, it isn’t justifiable to treat your CPA the same across all marketing channels that you are on.
A word of advice…
While all of these are excellent methods in determining your budget for marketing, you should always only invest what you can afford in marketing. It can be tempting to spend more and more on marketing, but all of your efforts will be worthless if you are losing more than what you are earning.
Try not to rush into it. You should do heavy research on how marketing will affect your business and how a specific budget will affect your operations. You can take things one at a time so that you don’t get overwhelmed by the actual amount you’ll have to spend on marketing.
Tips For A Cost-Effective Marketing Campaign
- Stick with what works – Instead of releasing a new type of campaign, again and again, stick with what works for your business. Capitalise on effective ideas first. You can then venture into new spaces once you have a little moving room in terms of budget.
- Use analytics – Analytics are going to be your friend when it comes to marketing. By analysing the numbers, you can determine whether you are effectively spending on your marketing campaign.
Focus on client retention first – If you focus your efforts on maintaining your loyal customers first, you’ll have a better grasp of your budget spending.
- Be Hands-On – Whether you are doing it on your own or are using the help of a marketing specialist, you need to be hands-on with your campaign. You need to be there to see the changes and the results at the same time. Doing so will help ensure that you aren’t spending more than what you can afford.
What’s Your Best Course Of Action
We highly suggest looking for the right digital marketing services in your area. At Constant Clicks, our team delivers cost-effective marketing campaigns that will help your business grow. Be it SEO or Google Ads, we’ll find the right way AND the right budget to promote your business with.
We understand that marketing can seem like a significant undertaking, but it’s also one of the best things you can do for your business as well. With the right marketing, you can go from being at the bottom to being at the upper echelons of your business within 90 days.
Today’s top businesses didn’t get where they are today solely because of the products and services they offer. Marketing has greatly aided them towards where they are now. As early as possible, make sure that you spend more than enough on your marketing campaign.