How To Build A Basic Marketing Budget
Maybe you've put off creating a marketing budget because you don't have the time. Perhaps you figure whatever needs to be spent should be spent. Or the guesswork in starting your first budget gives you anxiety. Whatever the reason, a marketing budget can guide your business in developing a great marketing plan and can help track and manage proper spending.
Step 1: Paint a Picture
Let's start with the easiest step. This is the time you decide how you want to prioritize your spending. Whether you are opting to use social media only, sticking to print advertising, or want to have a unique radio ad, knowing where you want to spend is the first step. Just starting out? Chances are you don't know what forms of advertising will work best for you, and that's okay, the first few years of any start-up are trial and error. But be prepared to spend more on marketing, the spending will even out once you are up and running.
Step 2: Sales Funnel
Picture this, a funnel. Now picture that funnel as a blueprint showing what steps your customers need to take in order to purchase a product or service from your business. Knowing your sales funnel will help you understand how customers find your business, what they need to know before purchasing from you, and the factors that lead to their final purchase decision.
This is a simple sales funnel, starting from the top and going down outlines the steps taken by a customer leading to their purchase decision. Awareness can be tracked by simply asking customers "How did you hear about us" or putting other analytical tracking in place.
Step 3: List Operational Costs
The best way to go about this is by creating a spreadsheet that lists all the current and anticipated operational costs. Consider costs such as professional fees, website hosting, outsourcing costs, and potential unforeseen costs that may arise. Simply put; know how much money is going out and how much is coming in.
Step 4: Set Goals
You can do this by setting targets for each month, quarter, or year. Feeling ambitious? Set goals for all three of those timeframes. The objectives you decide can be things such as revenue goals, number of new clients you want, or a growth percentage you want to hit. The most important piece of setting goals is tracking them. Tracking your ROI will help you decide where to change spending and even decide how to market.
Step 5: What's The Competition Doing?
What marketing methods is the competition using?
Are they favoring one platform of marketing over another?
Is it working?
What do you and the competition have in common?
Not to say everything your competition does will work for you, but it doesn't hurt to try. Don't stop observing what they are doing after you develop your initial budget, this will help you with new creative ideas and can help guide you on spending.
Step 6: Create The Marketing Plan (and budget)
With all the information you have gathered from the previous steps it's time to put them to work. Keep in mind:
What needs to be spent to achieve your goals
Marketing tools and platforms you want to use
Understand how your customers want to be targeted
*You can't build a marketing plan without a marketing budget first!