When you start a business it’s difficult to get funding. Even if you do manage to secure some money you can often spend it all before you think. Few new businesses will even consider putting any of their money into marketing as it’s can be quite expensive. The unfortunate truth is that creating a brand new business without a marketing budget is almost impossible to do. Marketing covers a lot of areas of your business, not just advertising. The benefits of marketing are well documented and if you create a strong marketing plan you will benefit from a return on investment. When it comes to thinking about your marketing budget you need to consider some of the following costs:
- Fees for an inbound marketing agency
- Salaries if you prefer an in house marketing team
- Office Space for an in house marketing team
- Any tools that you require (this can be costly)
- Travel expense
- Direct marketing costs (PPC spend etc.)
It’s recommended that you spend between 12-20% of your gross revenue on marketing if you are a new company. If you are established then you only need to spend 6-12% of your gross revenue. This might seem like a lot of money but it’s just as much of an expense as salaries and you need to start taking it a lot more seriously. You can’t just cut your marketing budget to zero and here is 5 reasons why.
A marketing budget keeps you competitive
In a world of so many businesses and brands how do you know which one to buy? A simple walk down the cereal aisle of any supermarket will show just how competitive brands can be. Your product packaging will help it stand out on the shelf but you need to ensure that people are aware that your brand is the best. The only way you can convince them of this is to employ marketing.
The single worst thing you can do is ignore your competition. If someone buys from a direct competitor then you’ve just lost a client who wanted what you sell. It’s difficult to get people to part with their money. It’s even harder if you aren’t advertising but your competitors are. Your brand will just sit there not gaining any awareness or traction while their brand moves up in the world. Eventually your clients will dry up and you’ll need to start competing with them using marketing, but by this point it will cost you a lot more than it would have initially. If you get a marketing budget earlier on you can compete with similar sized companies, and you won’t have to shell out a fortune later down the line.
It helps you understand your clients
The one thing that any business owner wants is to know who their client is. If you know your client you can specifically target them with what you know will work. Without a marketing budget you won’t be considering marketing and so you won’t know who your client is. It makes no sense to create a marketing plan if you don’t have any money to act on it. A marketing plan is one of the most powerful documents you can own. It not only gives you a direction with defined targets and aims but it also requires you to think about your clients.
Knowledge is power especially during marketing campaigns. Your marketing budget could be slashed if you don’t waste money on techniques that don’t convert. Your pay per click adverts might not be converting because you are targeting the wrong search terms for your clients. Your leaflets might not convert because you’ve the wrong colours and imagery. Market research requires a small marketing budget but it is well worth it. Just by starting out with some market research you’ll see an increase in website traffic and online leads.
You can track growth and sales with statistics
Growth is something which you should be tracking anyway. You’ll keep a record of all your sales and you can easily plot graphs with this data. The main advantage of doing this with a marketing budget is that you can track different data. You can track where each client comes by asking a simple question ‘how did you find us?’ No doubt you have seen this question online many times. By tracking the route that customers found your website you can find out what method of advertising is working for you. You can then change your budget to spend more on the methods that work, and less on the ones that don’t.
Data is key when it comes to business. Without data you are just throwing money away. You hope clients will find you, but with over 800 million websites online it’s highly unlikely. Like I said at the start of this article: Marketing isn’t just about advertising. It’s also about tracking statistics and you need to incorporate this into your marketing budget.
Increases your brand awareness
What is brand awareness? It’s something which you need to get before your business will gain traction. If people aren’t aware of your brand they aren’t going to buy it. The simple fact is 77% of people search for reviews online before buying. If you don’t have an online presence you are losing up to 77% of people.
Your website would come under a marketing budget. It’s possible to get a website on a monthly fee, but it’s also possible to get it on a onetime payment. One time fees are much easier to work with and will usually result in a better website. Agencies which charge a monthly fee are either over charging people who don’t know the online world, or using a template and all their websites will look similar if not the same. Without an online presence it’s very difficult for your brand to gain any awareness at all. You can start by using social media to gain some awareness, and this doesn’t have to cost anything more than your time. If you want to get started on Twitter you can follow these great tips.
Establish an online presence
Without a marketing budget establishing an online presence is almost impossible. There are businesses that have done it without putting a single penny into it, but that will take a lot of time. Your time is worth money. Only you can make the decision of when it’s worth paying others to use their time for your marketing, but someone has to do it. You can’t just ignore marketing. A marketing budget makes establishing your online presence so much easier. If you are interested in how you can establish an online presence you can look at the related articles below.
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