A budget helps one develop a plan to avoid overspending. It quantifies our marketing objectives and helps put them into action. Without a set budget, marketing dollars will be wasted.
Begin by organizing your financial information. Estimating business revenues and costs will result in an unrealistic marketing budget. Determine how much money your company makes on a monthly basis (the minimum amount it will make each month), and be aware of any variables that may exist.
The marketing budget is not set by the amount of total revenue the company makes, but rather established by the income that exceeds the company’s expenses. Once you’ve attained the amount of disposable income for your company, determine which areas of the business this money will be distributed to (such as marketing, unexpected costs, future growth, etc.) and how much will be allocated to each area.
Alright, now you have set an amount for your marketing budget. Next, establish where you want to spend your marketing budget. Factors that will determine how you spend your marketing dollars include the budget size, past experiences, and where to reach your target audience.
To get the most out of a limited budget, small print ads, online ads, social media, and email advertising are the best channels. A larger budget will allow you to spend marketing dollars on television and radio ads, providing you a greater reach.
However, advertising on all marketing channels will not be the most effective method for your company. Reaching a larger audience is not always better. You want to be able to reach the right audience. From past experiences, you may have noticed that e-newsletters help bring in more clients. This would be a better channel to spend your marketing budget on. Determine who your target customers are and what media channels they are consuming.
Now that you’ve set your marketing budget and executed your marketing strategy, don’t just assume it is working. Continue to evaluate and analyze the performance of all the different marketing channels you are spending your money on. Continuous improvement is needed. Find out what’s working and what isn’t, and make changes.
Explore different strategies to find the best solution for your company.
Source: Dave Lavinsky, Forbes Contributor
-Inderpal Gill, Firstbase Business Services