Marketing: “Communicating the value of a product, service or brand to customers or consumers for the purpose of promoting or selling that product, service, or brand.” (Wikipedia)
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WHAT THE HECK IS A MARKETING BUDGET?
In order for our products and services to get attention we must market them. Whether it be the old fashion ‘word-of-mouth’ or harnessing the power of the Internet, great marketing is often the difference between a successful business venture and one that flops.
While many companies would agree that marketing is important, many of their budgets, or lack thereof, prove they still don’t fully grasp the power of marketing. Sales is obviously important. But I argue that the businesses that will stand out over the next few years are the ones that merge the sales and marketing process together. Great marketing will increase your sales. A well-informed sales team will help create better marketing. In return, you create a powerful lead generation machine that will ultimately grow your business long-term. In order to achieve this powerful unity between sales and marketing we need to first put value back in marketing and understand that the investment we make is worth it.
Many of the companies I speak with have no clue what they can or need to spend on their marketing. Worse yet, the ones that do have a number are usually not even close to what they are looking to generate. When it comes to marketing, it’s important to see it from a value-added perspective. This will help you set more realistic numbers before you engage with a marketing agency. So let’s look 3 simple truths when it comes to your marketing budget.
1. You May Be Small, but You Still Need A Budget
Too many small business owners think that they are exempt from having a budget because they are just too small. This couldn’t be further from the truth. With less capital than your larger competitors, it’s extremely important to know where each dollar goes and to ensure that you maximize your ROI. Even if you aren’t doing “active” marketing what you are doing costs something. From your website domain to your business cards, small businesses need to know where their money is going and for what purpose. This gives you the power over your budget instead of the other way around. You may even find out that you have more you can invest in promoting your products and services.
2. You Have More to Work With Than You Realize
Today there are more avenues than ever to promote your business at extremely affordable rates. The trick is finding out what avenue will give you the greatest ROI. By having a clear budget you will be able to look at your options and then intelligently decide what strategy will be the best option for your business.
PRO TIP: Your budget should be tied to SMART goals. This will help you measure the ROI more effectively and in real business terms.
We all know this truth, but I think a lot of the time we like to ignore it. Nothing is free. Whether you are spending money on outsourcing your marketing, having one of your employees (or yourself) do it, or not doing anything at all, it is costing you something. By establishing a marketing budget you will be able to see what it is costing your business to promote yourself and if your resources are being used wisely.
If you’ve never set a marketing budget don’t worry, you can start today. There is no need to overcomplicate the process. Keep it simple. Just look back at last year’s tax returns or budget (if you had one) and ask yourself 2 questions:
- What did I spend on marketing?
- Was I satisfied with the results?
After you’ve answered these two questions see whether you need to change your strategy and invest more or less in a specific area. You’ll never know what you could do if you don’t know what you are doing! Take some time and develop your marketing budget. It will pay off in the end.