Developing Your Marketing Budget In 3 Steps

Marketing and advertising is the line item on the income statement that may be the most difficult to figure out. With so many marketing methods to choose from understanding the nature of your company and who exactly your trying to reach is a good starting point for creating a budget that is most effective.

The Inc. article,"How To Build Your Marketing Budget" offers insights, even of the most experienced marketers. The first point of reference the author mentioned was figuring out first how much you expect to spend. Like I mentioned earlier this could be a battle to get the "perfect" number. 

Step 1: How Much Should I Invest In Marketing?

Some of the suggestions were to invest 1% to 10% of sales, another marketing expert weighed in and mentioned that  a company should invest as much as they can in marketing, especially in the first few years. 

Also, it is important to understand your profit margins as well.

Step 2: Traditional or Non-Traditional Marketing?

The next suggestion the author gives is to figure out how and where you should market, by either going the traditional route or look into more of the social media resources. One of the experts suggested that before you start looking at that it is important to know exactly who you are targeting and what channels of marketing would be most relevant. 

In terms making social media apart of your marketing mix, it is very important that you produce compelling content on your blogs, social networks, such as Linkedin, Facebook, Twitter, etc. This type of engaging content, will keep customers and potential customers coming back for me. 

Even though social media channels are least cost effective in comparison to traditional platforms, its good to keep in mind the time commitment necessary to make social media work.

Step 3: Know Thy Metrics

The last suggestion was to track all marketing activities. One metric that is important to know is the cost per new customer. Once you figure out this number, you will be able to work on getting that number as low as possible without affecting profit margins. 

Also, paying close attention on what marketing channel is working most effectively in your marketing mix. Once that is identified continue to tweak that channel until you are yielding the results you are looking for.

We want to hear your thoughts?

• What other things would you add to this list?