The success of your small business depends on a range of factors. Among the most important of these is your ability to spread your message. After all, your would-be customers aren’t going to be able to spend their money on your products and services if they don’t know that you exist.
Marketing is the means through which we pass this information on. It should be informative, persuasive, and, above all, targeted at the people most likely to convert to customers. Like any other area of spending, your marketing budget should be determined in a data-driven way. You should be able to roughly calculate how much money your marketing is going to bring in, and then budget for it accordingly.
Look at the Bigger Picture
Before you delve into the details, it’s worth taking a broad look at what you think your big marketing problems are. It might be that your customers aren’t able to recognise your business because your branding isn’t quite up to scratch. Getting consistent with your booklets, flyers and promotional material might, therefore, be essential. Having formed this hypothesis, you can then test it.
Work Out Your Sales Funnel
Arriving at the right marketing budget means forming an accurate impression of your sales funnel. Follow the journey of your customers from their initial interest to their ultimate conversion, and determine where the value lies. Look at how many visits your site attracts, and what proportion of these turn into leads.
Know Your Operational Costs
How much your existing marketing operation costs will help you to determine how much extra you can afford to spend. As part of this, you should factor in the cost of inaction.
Often, a failure to do something can be more costly than even reckless spending – especially if you’re facing new competition entering the marketplace.
If your marketing budget is allocated only after every other cost has been covered, then it’s likely that you’ll underinvest. You can counteract this problem by setting yourself concrete goals. This should have been done as part of your business plan. Once you’ve set your goals, you can use them as a measure for success, and a bar at which to aim.
Analyse the Competition
If you don’t understand your particular niche, then you’ll have a tough time keeping pace with the rest of the field. Look at your competition and assess what they’re doing well and what they’re doing poorly. Are they favouring physical ads or digital ones? Which platforms are they targeting? Come to terms with the idea that you might be making mistakes, and ask yourself which ones they are.
Create a Marketing Plan
Having looked at the competition, established your goals, taken stock of your costs and analysed the strengths and weaknesses in your sales funnel, you can set your marketing budget. It might look vastly different from how you expected – but that’s okay! Make this review a constant process, and you’ll be able to keep your marketing approach optimised.