Factors to Consider Before Allocating a Marketing Budget
So you’re an entrepreneur that’s having a ‘once-in-a-generation’ idea, but clueless about how to take it to the audience?
This is where turn to marketing.
The marketing industry is replete with strategies and must-do stuffs. Therefore, it’s easy to get overwhelmed by the things that you should be doing to ‘help’ your business grow.
No matter how many ideas you come across, ultimately it boils down to your budget.
How much should you spend to achieve a certain goal?
If you’re new to the marketing world, below are some metrics that you need to be aware of.
Typically the marketing math goes like this:
New companies: If a company that has been in existence for one to five years, it is suggested to allocate 12 to 20 percent of your gross revenue for marketing spends.
Established companies: The companies that are in the business for more than five years ought to allocate somewhere between 6 to 12 percent of gross revenue.
Fixing the monetary component is not enough. You need to get the best bang for your marketing dollar.
Below are some factors that should be on the top of your mind while allocating your marketing budget.
Before you start shelling out money, ask yourself: What do you want to achieve?
What are your key goals?
You need to do more than just mapping objectives to the budget allocated by the management.
You need to bring creative and viable opportunities to the table and your management that you have strategies to achieve the key objectives.
Fortunately, advances in technology have made it easier to measure progress with data-driven and integrated marketing technologies.
With the integrated marketing technologies, you can now track your revenue goals, have instant visibility into spending and campaign ROI, know where you stand on customer satisfaction measures or market share growth (or virtually any metric you need) and adjust your plans accordingly.
Keep an Eye on External Factors
Before you start spending your budget, keep an eye on international arena.
Are certain areas too risky for investment?
Are you investing in countries that are impacted by unstable governments, civil unrest, natural/man-made disasters, climate change, etc.?
Monitoring the world also implies constant tracking of your company’s international performance.
Use the data obtained from the analysis and decide on spending your dollars.
Have a Solid Review Mechanism in Place
Marketers need to start investing in results.
It’s time to throw out those reams of old spreadsheets and update your processes to include marketing spend software.
There’s really no other way to get the visibility you need across today’s multi-channel campaigns; there’s really no other way to efficiently see when you need to step in and stop the bleed on programs that aren’t working and/or throttle up those that are performing well.
The point is, successful marketing is well-planned marketing, and successful marketing delivers demonstrable ROI.
Most marketers are entrusted with the spending responsibilities.
But, you should always remember that you’ll be able to keep management’s continued trust ONLY if you can show a positive return on marketing investment (ROMI).
Therefore ensure your objectives are clear and internal and external factors are considered – for they can make or break your marketing strategy.: