Many businesses are underspending on their marketing, instead choosing to focus on other facets of their business and then claiming they ‘can’t afford the cost of marketing’.
This mindset needs to change; marketing is not a ‘cost’, it’s an investment – as long as it’s profitable.
When you’re spending almost every dollar on things like product development, work-related travel and other expenses, while barely allocating any money to your marketing budget, you’re going to experience much slower growth in an economy that is all about speed.
So, just how much should your business be spending on marketing to grow successfully?
We suggest that you use as much of your revenue as possible, with 10% being the absolute minimum to get you seeing results.
We’ve gathered some information from companies who’ve been aggressive with their marketing, spending over and above 10% of their revenue which has led to incredible growth.
One example of successfully investing in your marketing is the revenue you can make (and should be making) as a business when using Google Ads.
If you’ve had doubts about spending money on Google Ads because you don’t know if you’ll get a good ROI, just remember that a business with a well-developed strategy can make (on average) $2 for every $1 they spend. (Source)
That’s doubling your investment, and your business simply can’t afford not to spend money on this and other forms of digital marketing; you’ll miss out on a large amount of business by not embracing this way of thinking.
Another company that developed a long-term and aggressive marketing strategy which led to amazing growth is Swisse, the vitamin company.
After their new CEO took his place in 2008, they implemented an incredible strategy and were not afraid to invest money into it. Celebrity endorsements, TV and sponsorship aren’t exactly cheap marketing methods, but by investing the amounts of money that they did, Swisse has taken the top position in the Australian market. (Source)
By seeing marketing as an investment rather than a cost, they achieved this astounding growth in less than a decade.
Many businesses have been running a lot longer and have never seen that type of success, which is why we’re so passionate about the importance of allocating enough revenue to your marketing budget to see great ROI and growth of your business.
Now that you’ve seen the huge influence that investing in marketing can have on your company’s growth and success, it’s time to sit down and really look at your budget and see how much more you can allocate to marketing.
Aim for 10% of your revenue as an absolute minimum, but try hard to find a way to use more; businesses can’t afford not to invest as much as possible in their marketing, otherwise, they’ll find themselves facing failure instead of success.