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What Should My Marketing Budget Be?
By Peter Lawless
Getting the most from a limited budget is quite a challenge for the average small business owner. I always ask, business owners how much they spent last year - and how much business did that bring in. Can you answer that question? And are you sure that all of your spend brought the best possible return? This article, gives some simple rules of thumb on setting budgets, an easy way to track your spend and some tips on where to spend your valuable budget. Generally people look for a 1:10 ratio on new products and 1:20 ratio on established products to maintain momentum.
Before you allocate any budget, you must have set some goals on what sales you are looking to achieve. After all a game of soccer would be pretty pointless without goalposts!
Generally people look for a 1:10 ratio on new products and 1:20 ratio on established products to maintain momentum. This means that for every Euro spent, you should get at least 10 euros in sales.
Going back to last year's budget, did you track it? Did you measure the effectiveness of all of your spend on Marketing? Large companies do micro analysis on all campaigns, with lots of testing. At minimum, you should track and monitor everything you spend.
It is good practice to have a sheet which you keep on hand and update as you go along.
This makes it easier to budget effectively and track the results of your spend. The headings above, are just examples, you should track each individual campaign, so that when it comes to next year's budget you will know what works, and what do ditch.
Who should I market to?
Most people think that if they spread their message around, then someone is bound to respond. This is simply not true. You need to carefully select who your likely "suspects" are.
Most business plans, suggest that you do huge amounts of market research, however if you have sold your offering already, and you have delighted your customers, then you already know who you should be prospecting to in the future.
you are an accountant, and you do some analysis of your existing customers and find that you have 10 plumbers on your books. This actually makes you an expert on helping plumbers with their financial matters.
It would make sense to target plumbers, by ensuring your message, preferably by using testimonials from other satisfied plumbers, is visible in the places that plumbers spend their time.
You should ask your self the following questions
1. Is there a trade magazine that they subscribe to?
2. Are their key suppliers that run trade shows, that you could piggy back on?
3. Are their websites that plumbers buy materials from that you could advertise on?
4. Are their specific stores that Plumbers go to, that you could leave some flyers, telling plumbers what advantages other plumbers have got from using your services?
5. Is their a plumbers association, that you could contact, and offer them some special discount or introductory offer through?
The list is endless, and indeed each industry niche that you service, will have their own specific haunts and influencers whose advice they seek.
Every industry is different, yet the principles of are the same. We have created a range of programs, to enable business target their most profitable niches, with messages that will turn them into eager buyers. Why not avail of our Sales & Assessment to see if we have a program for you and your top 3 niches. The assessment takes 45 minutes, and is free with no obligation on your part.
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This article was written by Peter Lawless, founder of 3R Sales and Marketing. For previous articles like this, visit 3R's Articles. Alternatively, subscribe to Success our free monthly Information Bulletin with sales and articles.