(marketing trends, tools, and must-dos in 2021)
Here at Marketing Nest, we get asked this all the time. Read on for our tried and tested process to get your marketing budget right each and every time. Marketing is a secret weapon that has the power to revolutionise your business. Let’s do this!
A marketing strategy is a set of pre-planned activities that can accurately draw the attention of prospects and capitalise on this to your advantage.
A well-designed marketing strategy can benefit your business in many ways, and not just with sales. Done well, your marketing strategy can improve brand awareness and visibility for your business, establish you as a trustworthy market leader, and ultimately lay foundations for new market entries.
Needless to say, a good marketing strategy needs to be strengthened by a great marketing budget plan.
Follow our simple 5-step guide for a super-effective marketing budget breakdown!
Step 1: Have a Talk With Yourself
The first and foremost step to drafting an effective marketing budget is to ask yourself the questions that count.
What are your business objectives?
- Brand awareness
- Boosting sales?
- Attracting walk-ins?
- Or maybe you just simply want to stay relevant?
Begin to prioritize your marketing objectives. However, keep in mind that not all marketing activities are compatible with all marketing objectives.
Step 2: Age Isn’t Just a Number
In business age matters. The early years are the ones where you have to nurture and feed your business and make sure it grows. In terms of Marketing Investment, when clients ask us how much should I invest? These are the questions we ask:
- How young is your business?
- How many steady clients do you have?
- How do you price your product and services?
- What is your annual gross revenue?
We’re not being nosy... we have developed a process that has been proven to work for your business and to give you the most straightforward answer on how much you should invest.
Think of your business as your baby. The time and money you spend on your child in the initial years is high and tapers gradually out until one day, they can finally take care of themselves, the same applies to your business.
So why do we ask your age, well, your business age?
Looking at the business life cycle, every business goes through almost all of these stages.
In our opinion, in the first three stages, a business should invest more into its marketing. Our usual advice is between 15 - 20% of your annual gross revenue.
More established businesses, with a steady and loyal client base, would usually fall in the maturity stage and can likely invest less. The assumption is that they have repeat customers, so they can afford to get by with 8-10% due to an already established reputation and visibility.
In the eventuality of the last stage, where none of us wants to be, the business owner needs to analyse why has that happened.
Is it due to outside influences that you can’t control or perhaps the business needs to differentiate and a revamp is needed?
In the latter, the owner would need to invest strategically into marketing without impacting on the business cash flow but still take calculated risks to survive.
Step 3: Clever Cost Calculations & KPIs
Next, it’s time to analyse your initial investment and set targets, to ensure you know what works and what doesn't.
Sometimes it’s best to invest not only with money but with your time, at the beginning of your marketing journey to avoid costly mistakes.
So, when embarking on a new marketing campaign always ask yourself: Is it measurable?
A crucial step is to estimate the average cost of each client and the overall value of your marketing efforts. The value, in this case, is the financial benefit that you get after your costs are taken into account.
Another useful target exercise is to set short and long term KPI (Key Performance Indicators). A Key Performance Indicator is a measurable value that evaluates the success of your marketing activities and shows if you are reaching your key business objectives. It also helps you avoid wasting time and energy on the non-profitable campaign.
Not only is it important to do a cost-benefit analysis, but it is becoming increasingly necessary to do an analysis of any marketing inaction. Were there any marketing opportunities that passed you by? Can you afford to miss out on joining a particularly popular marketing trend?
Step 4: Analyse your Resources and Skills
The time, resources and skills you already have available to hand is a huge determinant of your marketing budget.
How much of your marketing efforts can you afford to do in-house?
Do you have access to skilled and competent individuals in your team?
If the answer is yes, your marketing budget can afford to float low for a good amount of time, you could just outsource those core skills you do not have. If money is no constraint, revert to your business plan and set aside a budget for a professional team to take care of all your marketing needs.
Step 5: Competitor analysis
It is essential to run a competitor analysis. I know it sounds horrible to say, but if your direct competitors are seen everywhere perhaps you need to invest a bit of time and money in order to get noticed.
With a marketing expert to support your strategy and design the right marketing campaigns, you can pay attention to what your competitors are doing. You need to be aware of which platforms they are investing in, look at their website and any online and offline materials. Now analyse YOUR platforms and see how you measure up.
A detailed competitor analysis will give you a fair idea of the kind of campaigns you need to create and undertake and how much it will cost you.
A limited marketing budget does not mean the end of the world,
it just means you need to have more fun in getting your results!
Our Final Recommendation
That’s our process for having a quality marketing budget for your business that can save you a ton of resources, time, and most importantly, your energy.
Whatever your budget, make use of your resources...BRAINSTORM, ask your clients for feedback, ask your employees to support you, perhaps run a focus group?
A limited budget shouldn't mean NO marketing. Some of the most brilliant marketing ideas were born out of limited budgets after all.