You get out what you put in. It’s a famous saying that can be used in countless scenarios – especially in the business world. But one situation in particular that this saying couldn’t be more appropriate for is the amount of money your company spends on marketing expenditures.
What’s the magic number? Which amount is just right, and how do you determine how much is too much? Where should my money go?
Here is everything you need to know.
How to Calculate your Marketing Budget
Marketing budgets vary by industry. Whether you run a small business where every dollar counts or you have deep pockets as a multi-million dollar corporation, marketing is essential to your profitability and growth.
So, what’s the right number to allocate? Well, the amount you spend does depend on a long list of factors – including how much and how quickly you want to grow, the industry you’re in, the size of your business, and its growth stage.
Here is a general guideline for when it comes to the determination of that magic number and how much you should allocate for your marketing efforts:
If you’re looking to maintain your current position in the market, you should spend around 5 percent of your total revenue on marketing. If you’re looking to grow or perhaps gain more market share, then the number usually doubles to around 10 percent.
It’s important to mention that the rule of thumb listed above is generally used for businesses that average at least six-figures in revenue. For smaller companies or those that are in the start-up phase, a smaller budget should be calculated based on your net revenue and rough estimates of what your competitors are spending.
Where should I spend my budget?
There’s no question that in today’s digitally savvy world, a big part of your marketing strategy should be a series of digital actions or add ons, which can greatly help you achieve your company goals.
At the end of the day, it really all comes down to making sure you have an effective strategy that connects with your audience, builds brand awareness and increases your bottom line.
Easier said than done, right? That’s why we’re here to help; DRMG has a wide range of cost-effective options to help get you the results that you’ve been looking for. You can capture leads and sales with a wide variety of our offerings, which include: local mapping, social media management, search engine optimization, website maintenance, and hosting.
Another popular option that can help craft your campaign and optimize your conversion rate is by using shared media products. DRMG’s shared mail products allow our customers to share the costs of mailing with Canada Post – which in turn helps them reach many more potential customers for far less money.
Contact us today to find out how we can help you simplify your advertising and grow your business with a strategic marketing campaign.