Sam Makad is a business consultant. He helps small & medium enterprises to grow their businesses and overall ROI. You can follow Sam on Twitter, Facebook, and Linkedin.
In this blog post, we will discuss about some of the key considerations you need to be aware of with your marketing budget.
Marketing is an essential tool for your business to be found by the right people. In this day and age, a good website with strong SEO, and social media to fuel web traffic, or even PPC advertising, is just the standard if you want to be noticed by your audience. Some form of marketing is essential for your business to flourish, so you need to account for this when you are budgeting. Therefore, today we are going to talk about some of the key considerations you need to be aware of with your marketing budget - let’s get into it.
Taking All Financial Aspects Into Account
When setting your annual budget, you need to figure out how much you can afford to spend on marketing. The last thing you want is to find yourself in a position where you’re in the red. Therefore, you need to create financial forecasts and budget plans. The best place to start with creating a budget is to work out how much your current expenses come to. Add up your monthly costs and calculate how much money you have leftover. Don’t forget, you need to take aspects such as tax into consideration as well. To make the whole process easier, try using this handy VAT Calculator, which will help you to understand exactly how much money you will receive after every transaction.
See Marketing as an Investment
While your marketing costs will seem like an expense to start with, they’re actually an investment in your business growth. The whole point of spending money on a marketing strategy is to make more money, so you should see an increase in your sales after a while. However, your strategy does need to be affordable, so don’t go into debt just because you’re anticipating an increase in conversions in the near future. Gradually invest more and more money into marketing as your business grows and feel confident in the fact that this is money well spent.
Use Accounting Software
The easiest way to create and manage your budget is by using accounting software. It will really help you to understand how much money you’re spending on different areas of your marketing strategy and exactly how much your income has increased since you first made your investment. Accounting software can make calculations for you, so there’s a reduced risk of making mistakes and getting into financial trouble. What’s more, you’ll be able to access all of your financial information in one place and quickly create reports to help you manage your cash flow. Some types of marketing won’t deliver results very quickly, so you might not get a return on your investment for a few months, which might derail your cash flow temporarily.
In-House or Agency
Every business has to decide whether they want to hire an in-house marketing team, use an agency or outsource certain tasks to freelancers. Each option has its advantages, but some will suit your budget better than others. By far the most expensive option is hiring an in-house marketing team, as you’ll have to pay each employee a salary on an ongoing basis. You’ll also need to pay relevant taxes, pension contributions and provide them with equipment. However, having an in-house team can give you more control over your marketing strategy and will guarantee that there’s always someone around to do the work.
A marketing agency is ideal for businesses that aren’t sure how much marketing they’ll need or if they even need it on a long-term basis. Agencies are usually flexible and you can draw upon the experience of a huge range of professionals. While campaigns can be pricey, you don’t have to invest the same amount of money all year – simply ask your agency to lower the amount of work they do for you.
Finally, if you’re taking on a lot of your business marketing yourself, then a freelancer could help you to save time. They’ll be able to support your efforts as and when you need them to and can sometimes be cheaper than working with an agency.
Narrowing Down Services
Once you know your digital marketing budget for the months ahead, then you want to decide which areas of marketing you want to focus on. If you want to gain more organic traffic to your website, you need to optimize it for search engines. Do you want to create effective PPC advertising campaigns to target customers who you know have an interest in your product? That’s for you to decide - you could dedicate your budget to a few different marketing methods or focus solely on one type. The best option varies depending on what your business needs, and how much you have to spend. This is something you should consider discussing with experienced digital marketers.
Look for Low-Cost and Free Avenues
You also want to decipher what parts of marketing you can do yourself, without support. It is often better if someone who has knowledge of marketing has control, but there are plenty of ways for you to learn if it’s not something you’re familiar with. This way, you can keep your costs low and develop your own skillset at the same time.
When it comes to platforms like social media, it’s really easy to get started for no cost at all. Other low-cost strategies include SEO and content marketing, but you may decide to invest in paid tools to speed up this process. The important thing to remember is that you really do need to learn how to put a strategy together – it’s not enough to know how to use Instagram or write a good blog. Marketing experts are expensive for a reason, so you should expect to invest a significant amount of time into learning the ins and outs of the channels you want to target.
However, you need to remember that time is money, so if taking control of your marketing is taking up too much of your time, it might be better to hire a professional. As with everything, you need to find a balance that works for you. Don’t sacrifice actually running your business for marketing.
Have Clear Goals in Mind
After deciding on the type of marketing you want to pursue, you need to create achievable goals for your business. It’s very difficult to budget properly if you don’t have a clear idea of what you hope to get out of the money you spend. For example, when an agency gives you a quote for the campaign you’ve been planning, do you understand what you hope you achieve? Will your website get more traffic? Will your sales increase by 50%? Having these figures will allow you to understand whether the investment will be worth it.
The key takeaway here is that your goals must be measurable and achievable. While you might like to double your income, is this really possible with the current amount of money you have to spend? Speak to your marketing team and work with them to decide what goals work best for your business.
Adapting Your Budget As and When
If you’re pushing a certain event, launching a new product, or you simply want a surge in custom, then you may want to increase your marketing budget at certain times of the year. This could also be part of a smart strategy. For example, if you have an e-commerce store, around big events like Christmas, you could increase your advertising spend, to ensure people are buying from you over your competitors. You need to constantly be assessing what’s working and what’s not to be on top of your game.
Use Analytics Software
Analytics software is crucial to helping you understand whether the budget you’ve set aside is actually worth it. You need to constantly monitor your marketing strategy to make sure it’s producing results because, if it’s not, your money is better spent elsewhere. Compare the amount of money you’ve spent with the return on investment you receive and discuss the results with your marketing team. Sometimes, the answer might be tweaking the strategy you have, while other times it could be better to pursue different marketing avenues. If you’ve only ever worked with one marketing team and haven’t been seeing results, that could be a sign that it’s time to partner with someone else.
When it comes to budgeting for marketing, you should always remember that the return is often greater than the spend. It can be daunting to spend money on something as intangible as marketing, especially as a new business, but it really is the best way to grow. Try to focus on the results you expect to see and take the process one step at a time.
Patience is incredibly important, so it doesn’t matter if you have to set aside some money each month before you can afford the campaign you’ve been dreaming of. In the meantime, do a little bit of work yourself – set up a social media profile and think about the web pages on your site. In time, these small changes will add up and save you money.
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