How big should your marketing budget be?
By Kylie Harcourt, Sep 27 2020
Trying to decide how much to allocate in your marketing budget?
It’s harder than picking a flavour at Duck Island Ice Cream. When it comes to marketing, it can be an all-encompassing term. Advertising, branding, customer relationships, buyer behaviour, social media… where do you draw the marketing line, so to speak?
A guideline always comes in handy. Some recommend allocating 7-8% of your gross revenue to marketing and advertising. But, because all businesses are different, it’s difficult to apply a hard and fast rule when it comes to setting a marketing budget.
Instead, we think it’s better to follow these simple rules:
- Define your ‘why’
- Establish a marketing strategy
- Track your ROI
- Be realistic about your budget
Define your goals
Before even thinking about marketing, we need to explore the important question of, “why?”. Why do we do what we do? This allows you as a business to align yourself and your organisation with a set of values and beliefs that you aim to uphold.
With a clear understanding of your Why, everything else falls into place, from your product or service offering, to your recruitment strategies, to your company culture, to your marketing and communications.
Once you’ve determined your why, you can take the next step towards defining a clear marketing strategy.
Follow your plan, but be flexible when needed
It can be easy to get distracted by shiny new marketing things along the way. But this is where a marketing plan can pay dividends, literally! When new, fancy whizz bang flavours, or rather marketing ideas, pop up you can refer to your plan and ask yourself:
- Will this idea help us meet our objectives?
- Is this idea relevant to our target audiences?
- Is this idea more important than the other activities we had budgeted for?
Of course, plans need to be flexible and fluid, but we shouldn’t lose sight of our goals, objectives and priorities.
Measure, review, refine
Having a plan in place enables you to adjust your budget during the year as required. Did your Facebook campaign generate as many new leads as you expected? Are you happy with your cost per conversion? Has anything surprised you or given you better results than anticipated?
By actively monitoring and measuring your marketing ROI, you can make better decisions about how much to spend on each activity, and where you should invest more or pull back spend.
Be realistic about your budget
There’s only so much ice cream one can eat, and the same goes for the amount of marketing activities you can incorporate into a finite budget.
Many factors will influence your marketing budget, including your goals, desired outcomes, competition, and how much you’re willing to spend.
But, just like ice cream, you never know what it’s going to be like until you try it!
If you’re ready to talk about creating a meaningful and realistic marketing budget, or you simply want to compare Duck Island ice cream flavours, get in touch with the HGB team today.