Most business owners appreciate just how important marketing is, but when it comes to implementing their own marketing strategy, they fail miserably. The two main reasons for this is that small businesses don’t invest enough money into marketing, or they spend their budget carelessly. And the latter is far more damning to a company’s success.
So to avoid any mishaps in promoting your brand, you need to create a clear budget plan and stick to it. This way, you’ll avoid the temptation to misuse and meddle with your “marketing money.”
First Stop: Calculate Your Budget
Before you learn how to stick to your marketing budget, you must know how to calculate it first.
Most businesses set aside a certain percentage of revenue (or projected revenue) to cover their marketing campaign. According to an article on the US Small Business Administration website, this is usually about 2-3% for run-rate marketing and anywhere between 3-5% for startup marketing.
However, the actual figure will vary depending on the industry you’re in as well as both the size and ‘stage’ of your company. For example, the US Small Business Administration notes that retail entrepreneurs tend to spend a higher amount of money on marketing during their early brand-building years, which is usually up to 20% of sales.
A small business with a revenue of less than $5 million should allocate 7-8% of it to their marketing endeavors. The budget should be split between:
- Brand development costs (including all mediums through which you promote your brand, i.e. website, blogs, sales collateral)
- Costs for promoting your business (advertising campaigns, events)
However, you need to measure the “amount you allocate to marketing” from your profit margins. If you have low profit margins, then you should consider amending your business operations by adjusting your expenses so that you can afford to allocate additional costs to marketing.
It’s not an easy decision to make, but you must ensure that your marketing budget is not simply based on residual expenses after all your other business expenses are covered.
Second Phase: Implement Your Strategy
And once you’ve laid out a budget, you have to be loyal to the cause. With that, here are five steps to help you stick to your marketing budget:
1. Surround Yourself with Reminders
This is perhaps the easiest thing that you can do to help keep you on track. Although it may seem rather trivial, writing down reminders such as “Stick to your budget”, “You only have $10k to spend” or “Don’t exceed the limit” can go a long way in motivating you to remain focused on your marketing budget.
You can use several techniques to remind yourself of your marketing targets and budget efforts like putting motivational quotes in post-it notes, screensaver or weekly emails.
These may seem like extreme measures, but you’ll be surprised at how effective they can be.
2. Create a Clear Plan
Write down a clear and actionable plan outlining how you are going to utilize your marketing budget—including where you are going to spend the money and how much each marketing channel will require.
Additionally, you should try and set dates to each marketing action and aim to meet those deadlines which could save you from dragging expenses. Similar to following an exercise plan, writing down all your marketing schedules and goals will help keep you on track and focused.
3. Break Your Budget to Pieces
You should create smaller budgets within a “main budget” so that you can monitor where each marketing success or failure is coming from.
For example, let’s say you allocate $5,000 for a TV ad. This will be your main budget. You then need to break this up into sections, for instance: $1,000 for actors, $2,000 for crew and so forth. If your budget goes slightly over $5,000 you can then look back at your smaller budgets to see where you spent the additional costs. If you spent $200 extra on the crew, you’ll know for next time that you will have to hire cheaper crew or possibly negotiate better.
4. Find Less Expensive Methods
Before the prominence of digital media, companies had to rely on major television and radio campaigns that truly stretched their pockets. However, you’re now likely to find your customer base online and the means to reach them are aplenty.
You should already be on the big three social media platforms such as Facebook, Twitter and Instagram. Ensure that you’re active on these channels by constantly updating and informing your followers of your latest product news.
It’s good to be creative with your social media marketing strategy by interacting with followers. Tell them to upload some pictures of themselves, with the winning upload receiving a discount for your new product. Get them to like and share your post, and soon enough you’ll find that your followers’ friends are following you too.
Using the “free” social media platform to market your brand or company will significantly help you stay within a marketing budget as it requires little, if at all any, of your budget.
5. Monitor and Make Decisions
Aside from taking note of the smaller budgets within a main budget (point 3) to identify where your costs are exceeding, you should also monitor every aspect of your marketing campaign to keep you on track.
If you sent out an email campaign or requested social media posts from followers, make sure you have a system in place to track each respondent. This way you’ll be able to identify which ‘group’ you should begin to channel your marketing towards and therefore alter your smaller marketing budgets toward that demographic.
Additionally, if you have a marketing team that handles your campaign, monitor their performance without micro-managing. If you’re not getting enough conversions through social media, have a word with your social media manager, if you have one, and brainstorm about new ways to be more effective. The last thing you need is to stretch your marketing budget simply because all your free social media methods failed.
And Remember …
The word “budget” can easily be replaced by “limit”. If you repeat “marketing limit” over and again, your subconscious will come into play and even help you stay within the allocated amount, as you know you have a financial limit.
However, the most important thing for the success of your product is sales. If you’ve exhausted all avenues with your budget, don’t be afraid to start over and spend a little extra for a bigger and better campaign. But this should be the last, most unfavourable resort. After all, you should have followed the steps carefully and created a calculated, clear budget that should fulfill all your marketing needs, whatever the limit.