How to Create a Marketing Budget That Produces ROI
Everybody needs a well defined marketing budget. Without guardrails, things can really go sideways.
When you draw a picture, you can take a step back and examine it.
You can see it from all angles and know what to fix, erase, straighten, lengthen, or maybe even scrap. Putting together a budget for marketing requires similar observations. When you’re building a budget for your marketing strategy, you need to take time to draw it out before you begin spending money.
This may seem like marketing 101, because it is. Yet so many businesses really don’t adhere to it. And for very small businesses…if you don’t have a marketing budget, how can you expect to grow? Most do this activity in December or January, during annual planning, and then forget about it. We still have 5 months left in the year. Why not take another look now and reset your plans?
Why is it so important to have a budget before you start spending? For one, you don't want to go overboard. You also want to make sure that you’re covering all the bases and thinking through the bigger picture.
Lay it on a spreadsheet or paper, whatever you’re comfortable with. This gives you something you can bounce off your team, peers, or advisors for their thoughts.
Here are some ideas on how to create one that is just right:
1. Decide what types of marketing to invest in. Start by outlining different marketing platforms you want to use or try. It could include email marketing, content marketing, social media marketing, or traditional marketing options. Then review which ones generate better results and which ones do not.
This way, you can determine which ones you want to invest more. Then, allocate higher budgets for those and less for others.
2. Evaluate previous campaigns. Previous marketing campaigns can help you have a reasonable estimate of how it will perform and how much it's going to cost. You want to pay attention to the details, like what campaign generated the most traffic, engagement, sales, content downloads, and shares.
As you review the previous budget, engage your marketing team or advisors and evaluate how much you spent, where you spent it, how successful the campaign was, and areas where they feel the money was well spent or wasted.
3. Do further research. With research, you can know what to spend money on. Ask yourself what keywords have performed best for you. Analyze your competition. Where are they putting their money? Where are they doing their marketing? What keywords do they use and underutilize? Tap into your local community and peers. What’s working for them that you might incorporate?
Of course you need to spend a lot of time thinking about where can your audience be found? (For many, it’s LinkedIn) And then how to reach them in those places.
Evaluate how big your social media following is and how engaged they are. It will help you determine whether you want to spend the money growing those aspects. Whether there is untapped gold there. Or whether you need to grow it.
4. Look at your finances and objectives. You can't start digging a hole without your tools. Budgets are created with money, so look at what you have available. Figure out how much you can afford to spend on various channels. Consider your company's revenue, customer churn, and retention rate.
Consider your business objectives if you have new products to launch or new services to promote.
5. Allocate your funds. Make a list of all the channels you could use, then choose which one will have a more significant impact on your goals. Spend more on those. Don't stretch your budget too thin by trying to market on every platform available.
Especially if you don't have the funds and the staff for it, it can be tough to track the success of your marketing campaigns.
6. Hold a little money in reserve. Always leave room for surprises. When a platform you weren't expecting a lot of conversions from starts to do well, you can react appropriately by pushing your spare funds there. It helps you accommodate wins or losses and double down on things that work for you.
You can also prepare for unexpected problems that may result. The extra money needs not to go to waste if it's not used. You can put it aside for the next marketing budget you draw.
There is no one size fits all approach for building your marketing budget. If something is not working, admit your failure and make necessary changes. Track your successes as closely as you track your failures.
Don't throw good money into something that won't work because you can afford to. The money that big companies blow on marketing just because they have to spend the budget is unbelievable.
Keep adjusting and adapting to changes in market trends and platforms. Then you can create an impactful marketing budget to drive growth the rest of this year, and beyond.
Hope these ideas spark some creative thoughts (and actions!) for you.
Thanks,
Josh
Josh Turner
Multiple times Inc 500 + 5000, WSJ Bestselling author, dad, #LetsGoBlues, top LinkedIn expert, helping small businesses get more leads and clients online.
P.S. When the time is right for you, here are a couple ways we can work together:
My on-demand LinkedIn Accelerator, which includes training and 1-on-1 consulting with my head coach. This program focuses on my 5-step methodology to get connected to a lot more prospects, and build relationships with them through strategic messaging, to generate an average of 10-15 sales appointments per month. CURRENTLY CLOSED - No new enrollments as we are retooling and preparing for a re-launch of this program!
Work with me 1-on-1. Hit reply to this message, tell me about your business and let me know what you want to work on together. Then I’ll get you the details on my consulting work.