What You Need to Take Into Consideration When Budgeting
Your marketing plan is only as good as your budget. Creating a well-thought-out marketing budget is a must if you want to reach your performance goals. And it’s not just pulling a figure out of thin air — in order to budget properly, you should take multiple factors into account. You don’t want to overspend, but you also don’t want to under-spend; the goal is to find just the right balance that benefits your business. Here are a few things to consider when you start developing your marketing budget.
1. Your Target Audience
No matter what you decide to do with your marketing budget, your audience needs to remain at the forefront of your mind. What are their needs? What social media platforms do they use? What’s important to them? Are they new or returning customers? Having a clear understanding of your target audience will help you allocate a proper budget and develop a clear strategy.
2. Marketing is an Investment, Not the Cost
When developing a marketing budget (and marketing plan), make sure you remember that marketing is an investment, not a cost. In other words, your marketing budget should focus on growth opportunities as well as those that will let you keep your existing customers. The idea is to position your marketing efforts, not as another cost, but as a necessary expense to grow your company.
3. What Do You Want To Achieve?
Another thing you need to consider is what you hope to achieve through your marketing efforts. Are you trying to increase sales, or is the goal to increase website traffic? You may even have unique marketing goals based on any number of factors. Either way, before you start budgeting, you need to set some S.M.A.R.T. — specific, measurable, attainable, realistic, and time-oriented — goals to determine the steps you’ll need to take to achieve them, including how to develop your marketing budget.
4. The Competition
When trying to set a marketing budget, you need an in-depth understanding of your niche. In other words, what are your competitors doing? What are the current trends in marketing and advertising in your industry? Answering these questions will help narrow down what kind of marketing and advertising you should be focusing on, and save you some time in the long run.
5. Your Acceptable Cost Per Lead and Production Capacity
Is a perfect world, you might say that as long as your marketing is generating revenue, you could end up with an unlimited budget. However, if you have a limited production capacity, it’s important to keep this in mind. It would be bad for your company to create too much demand for a product or service if you cannot meet that demand.
Do you need an in-depth analysis of your business and industry to develop a marketing budget for 2021? Contact us today to learn more.