As a business, you must walk the fine line between spending too little on marketing and spending too much. We all know the saying, “it takes money to make money”. This becomes truer when you own a business. Many businesses will decide to cut back on marketing when business is slow because as it seems an easy avenue to cut costs. On the other side of the coin, you have people cutting back on marketing because too much business is flowing in and they cannot keep up with demand. In this article we are going to explain why both scenarios are a bad move to make.
As a new business, it’s true that you need to watch your spending. There are many costs associated with starting a business that you want to try keep expenses to a minimum, at least while you grow your reputation. Each industry is different so there is no copy-and-paste solution. Even within specific industries, every company is different – what might work for your competitor, might not work for you.
When you start out there is going to be a lot of trial and error with things like Google Ads and other social media advertising. If you cannot afford to lose that money without any profit, then you should focus your efforts in other forms of marketing in the beginning. Just remember, that you WILL need to market yourself in some way so that people can find out that you exist. For quick scaling, perhaps budget 12-20% of your overall gross revenue. If you’re budgeting based on projected figures, then start off with at least 12% for now.
A more established company has a little more to work with. You have more statistics to work with, you already have database of existing clients to market to, and you probably have a more stable cash flow to work with. Even though you have an existing customer base, you will want to introduce yourself to new potential clients. Introducing your brand to new clients isn’t as important for an established company so you could average your marketing budget at 5-12% of your overall gross revenue. Just don’t forget to keep in touch with your existing clients.
Where to market?
You will need to do a bit of research for your industry. Consider what your competitors are doing as this will give you a good starting point. For example, a photographer being on Instagram and Pinterest is a good move, but an accounting firm would work better on Facebook or LinkedIn. There are many places that you could focus your marketing, writing a list of the ones you want to use is probably a good idea. Make sure to put them in a list that is sorted in order of priority.
Some good ideas to think about:
- Google Ads
- Social Media Advertising like
- Facebook Advertising
- Pinterest Promoted Pins
- LinkedIn Advertising
- Social Media Platforms
- Content marketing like a blog on your website (you could also share this across your social media platforms to generate traffic on your website)
- Good SEO and on page SEO optimization will help your website rank higher in search pages
- Physical Marketing like
- Outdoor Signage
- Vehicle Signage
- Email Marketing (Remember to get explicit permission before adding emails to your database)
Once you know where you want to start, carefully consider which avenues will present a higher ROI than others. If you have a restaurant then handing out flyers locally would have a higher ROI than launching a Facebook advertising campaign. But if you are more web-based, then online advertising is a better starting point.
Be realistic about what results you hope to yield from your marketing. Printing 5000 flyers won’t bring you 5000 customers, having 500 people click on a Google Ad doesn’t mean that 500 people will buy from you. If you can afford to hire a professional to do all of this for you, then do it! Just as you are a master of your craft, they are masters of theirs. They have been in the business of marketing for a long time and will have a better idea of what will work and what won’t. While they work on your marketing, you can focus on the business itself.
Already started, where to now?
If you are established business, then chances are that you already have some form of marketing in place. This is great news! But don’t stop just because what you are doing is working. The idea is to GROW your business to new heights.
Figure out what is working and build on it, toss out what isn’t working and do some research on some new ways to expand your marketing. Build up a marketing strategy based on what is and isn’t working and divide up your budget based on the strategy. Prioritize what is most important and don’t forget to stick to the budget. Don’t gamble with money your business can’t afford to lose.
When to slow down on marketing?
Never slow down on marketing. The less you market, the less potential business will come your way. If you are battling to keep up with the influx of sales, then hire a temp or increase your prices temporarily. Whether you are battling to get sales in or battling with too much sales coming in, slowing your marketing is never the answer. As a guideline, keep your budget between 8-16% of your yearly budget.
Do you need help to navigate your marketing strategy? Contact us for a FREE marketing strategy proposal.