9 ways to set your marketing budget
TRANSCRIPT
Determining the Right Amount
There are many ways to set a marketing budget.
But it can be very overwhelming to choose the right
amount.
Determining the Right Amount
There is no one “correct” budgeting strategy.
Here are
to consider.
9 Marketing Budget Strategies
Budgeting Option #1
Use a percentage of your revenue.
Most startups and small businesses allocate 2-3% of
revenue to marketing.
Budgeting Option #1
Use a percentage of your revenue.
It is not uncommon for larger companies or those in competitive industries to allocate
10-15%.
Most startups and small businesses allocate 2-3% of
revenue to marketing.
Budgeting Option #2
Use a percentage of your net sales.
Similar to using a percentage of revenue, but you are deducting returns, discounts, and
allowances.
Budgeting Option #3
Budgeting based on your competitors’ marketing expenditures.
Figure out how much your competitors are spending on
marketing, then budget slightly more to increase revenue
accordingly.
Budgeting Option #4
Use anything and everything you can afford.
This aggressive strategy is very risky, and can either work to your advantage or fail miserably.
Budgeting Option #4
Use anything and everything you can afford.
This aggressive strategy is very risky, and can either work to your advantage or fail miserably.
Use with extreme caution.
Budgeting Option #5
Budgeting based on desired customer growth.
Your marketing budget will be determined by annual customer target numbers.
Budgeting Option #5
Budgeting based on desired customer growth.
Your marketing budget will be determined by annual customer target numbers.
Ideal # of customers
Cost to acquire 1 customer
x =
$$
Budgeting Option #6
Marketing for free.
If you don’t have any marketing funds, consider guerilla
marketing tactics like word-of-mouth.
Budgeting Option #6
Marketing for free.
If you don’t have any marketing funds, consider guerilla
marketing tactics like word-of-mouth.
This can be very time consuming, so marketing for free may not be a wise
choice.
Budgeting Option #7
Get professional advice from an industry source.
Industry insiders can accurately project how
much to spend on a successful marketing
campaign.
Budgeting Option #7
Get professional advice from an industry source.
However, this number is often unattainable for small business owners.
Budgeting Option #8
Budgeting based on corporate objectives.
This is a great way to market because it’s
tailored to your needs.
Budgeting Option #8
Budgeting based on corporate objectives.
Create a marketing plan that maps out exactly how much you will spend on
each tactic.
Budgeting Option #8
Budgeting based on corporate objectives.
Create a marketing plan that maps out exactly how much you will spend on
each tactic.
If possible, consult a professional to help
tailor your ideas.
Budgeting Option #9
Budgeting based on preferred market share.
Use this tactic if your goal is to attain a specific percentage of your particular market.
Budgeting Option #9
Budgeting based on preferred market share.
1. You will first have to calculate the total marketing spend for every business in your market.
1. Then figure out where you stand and how much to spend.