Marketing Budgets – How Much Should You Spend?
Marketing budgets vary from company to company, depending on the size, products/services offered and the industry that they operate in. With an array of new technologies and ever-changing strategies to drum up new business, targets are changing and Increasing more rapidly than they have ever done before.
So, the question is, how much should you spend on Marketing? Again, there is no definite answer but the reality is, for most companies you will need to set aside at least a fraction of your turnover to focus on marketing. Times are changing and the days where you could get by on word of mouth, recommendations and people looking you up in the yellow pages are long gone. You need to be proactive and smart when it comes to marketing to ensure you win new business.
Company budgets vary just take a look at Red Bull, they are brand that is recognised around the entire globe and that reflects in the amount they spend on marketing, they own a Formula 1 team, four football clubs and are seen on TV, posters and billboards most days of the week. Clearly, this isn't cheap but it works for them and their brand. This doesn't mean you have to go out and form your own formula 1 team and football club as quite frankly that is unrealistic for 90% of companies in the world. What you need to do is find out what works for you and your business and how much of your turnover you can afford to make this happen.
Work Within Your Means
Work within your means, whether this means allocating 5%, 10% or 15% of your turnover, the choice is yours but you need to make sure you have a clear strategy and direction in place otherwise you could end up firing blindly. Yeah, you may get a few hits and bring in a little bit of business but you could also spend a lot of money in the process making it not worth your file.
Strategy is Key
A great marketing strategy will stretch your marketing budget to its limit, making the most of it and getting great results whilst increasing turnover exponentially. If this is the case and you have a strategy that works for your business then the following year you can increase your marketing budgets further and work within your means. Perhaps, it went the other route and didn't perform as expected and therefore you have to go back to the drawing board. All this means is the following year you may have to reduce your budget slightly to work within the businesses financial capabilities.
If you don't succeed the first time you shouldn't put it off and fall back into bad habits as in the long run, this will be detrimental to your business. It may take a period of trial and error to see what works and what doesn't for your business but when you find the perfect strategy for your company, it will be like a license to print money and the small financial sacrifice you put in to find this strategy will be worth it.
At the end of the day, there is no exact science to how much you should or shouldn't be spending on marketing. One thing for sure is that you definitely should not put all your eggs in one basket and risk spending a lot of money that your business can't afford on a campaign that may or may not work. You have to work within your means. If you are a small business taking your first steps into the marketing world you may only want to allocate 5-10% of your turnover as that is what you can afford without having to worry about cash flow etc. There will be a strategy that will work for you with this type of budget. The same goes for a medium to large company, if you can afford to allocate 15-20% of your turnover to marketing then so be it, but make sure you have a clear strategy in place to give your business the best possible chance of making the most of your budget, which will result in new business and an ever-increasing turnover.
For more information on any of the above or if you would like to discuss your marketing requirements with Equinox call 01934 643961 or email firstname.lastname@example.org