Marketing is an enjoyable and creative way to build a relationship with your customers. Although dreaming up executions, taglines, and unique campaign ideas can be loads of fun, you can’t start without crunching numbers. Carefully and strategically allocating your marketing budget will ensure you stay within the confines of what you intend to spend. Since this may not be the part of marketing that you’re most excited about, we’ve simplified the budgeting process into four simple steps to help you get the most out of your marketing budget.
Firstly, to start creating your marketing budget, you must determine how much you’re willing to spend on the entire marketing campaign. Most businesses allocate around 7-10% of their net profit into marketing efforts. However, you may need to use a larger percentage depending on your marketing needs. Usually, new companies spend more to begin to build a loyal consumer base, whereas well-established companies will stick to the usual 7-10% to ensure their existing consumers continue to stay engaged.
Once you’ve determined how much you’re willing to spend, it’s time to determine the goals you’re seeking to accomplish succeeding your marketing efforts. The most crucial thing to keep in mind when setting your marketing goals is to ensure they are measurable. After the marketing campaign has run its course, you will need to measure the success of your campaign by measuring your marketing goals. Vague goals will not cut it in this instance. The more specific and measurable your goals are, the easier it will be to determine the success of your campaign.
ROI (return on investment) is how much profit a company makes as a direct result of marketing efforts. ROI is tricky to calculate since you won’t know how successful your campaign will be before it’s public. However, you can get a decent estimate of your potential ROI by looking at the results of campaigns you’ve done in the past, or similar ones done by competitors in your industry.
Now it’s time to split up your marketing budget into the different channels and resources necessary to execute your campaign. Your budget should consider the cost of media buys, freelancers, employees, event costs, and contingency. Moreover, your budget should be a direct reflection of your marketing goals. Allocate more of your budget toward your primary marketing goal and less of your budget toward your secondary marketing goals. Doing so will ensure that you’re placing most of your budget toward the marketing goals that are most important to your company.
We hope we were able to simplify the daunting process of budgeting for you. Although these steps are a good starting point, many more factors should be considered when planning your marketing budget. If you find yourself puzzled by all the numbers and data, call us today! Our team can help explain our calculations while simultaneously helping you allocate your marketing budget to ensure you reach your marketing goals cost-effectively.
Grova Creative is a woman, minority, and veteran-owned agency headquartered in Tallahassee, Florida, and works with clients all across the United States. If you are a business or organization seeking help with advertising, marketing, branding, messaging, marketing, strategy, website development, or other creative assets, visit grova.com.