The timeless question. “How much should I spend, when I want to market, advertise or promote my new….?”
Ultimately, it all comes down to planning and budget. You have to plan, segment and execute with strategies that will not only achieve you objectives, but align with your budget.
Here are a few tips for navigating that elusive marketing budget:
1. Marketing Math
Do you know what your budget is?
New companies: For companies that have been in business for 1 to 5 years, I’d suggest using 12% to 20% of your gross revenue or projected revenue on marketing. If you’re under a year old, you still need to build and develop your business and clout before spending budget on marketing.
Established companies: For those companies that have been in business more than five years and have some market share/brand equity, we suggest allocating between 6 and 12 percent of your gross revenue or projected revenue.
While this may seem like a lot, remember new and emerging brands are looking to capture new market share and develop brand recognition with an audience that doesn’t know who you are. Once the brand is established and a portion of the market is brand-conscious you can reallocate funds accordingly.
2. “I need to grow my brand to make money, but I have no money to help do that.”
Branding isn’t easy and you’ll make some mistakes along the way. This is why it’s very important to build and fund this strategy accordingly. Just like any large project, it will take time, effort and money. Really, when is the last time you built something free that has endurance? It’s also important to make sure your dollars are spent wisely and tied tightly to specific deliverables. Don’t waste money building the wrong thing. Aim to set objectives and execute on the right tactics the first time.
3. The Marketing “Must Haves”
You need these, it’s as simple as that. The marketing mix (and spend) may differ, but you should plan for all of these.
- Social media
- Public Awareness
- Local Advertising