Marketing is the key to the products/services that have pioneered the market. In the world of growing economy where none has been left as invention, placing the products right in the minds of the customers makes the difference. Therefore, every company irrespective of the size it is working in, focuses maximum on fixing the right kind of marketing budget. Great brand stories are inspired by their intelligence in marketing to carefully reach the pinpoint of their target audience.
Marketing is not always about reach your target audience it sometimes also, lets you convert the audience as your target audience. Smart play is the key to marketing success. Understanding the product and its prospect buyer is important. Their taste, preferences and lifestyle gives you major idea about how successfully you can enter in their life. For example, if your target audience is older consumers, marketing money spent on social media campaigns may not be effective in reaching them.
One of the easiest way to keep a track of your marketing money is by by developing a strong marketing strategy followed by a solid plan. Following a well-defined plan will help ensure you’re spending your marketing funds wisely and appropriately. Apart, from this keeping a track of each penny you spend is important. It enables your scope of financial decision making in future.
Your company’s market plan should include everything from your target audience to the competitive edge that the product has in the market. It is foremost to set your differentiators from competition in the market. It helps you promote your USPs.
The marketing budget is an essential component of your marketing plan. It will outline the costs of how you are going to achieve from your marketing goals within a certain time frame.
Here are the six steps to developing a marketing budget as part of your marketing plan:
1. Know Your Sales Funnel
Understanding sales is important in order to have an effective marketing budget is important. It will require you to track results from revenue cycle, from prospect to customers and so on. Harvesting this data from an online invoicing Software makes the entire process of result evaluation easy. Question yourself on various aspect of cash flow and carefully decide on how you would then want to spend your money. Knowing the importance and worth of each platform, that you are looking to spend on, is important. Based on your data collection and research, you can ask yourself a few of these questions to get on to a better result.
- The amount of site visits you have per month?
- The number of leads you are generating per month?
- The number of leads that convert to sales qualified leads?
- Total cost associated with generating these SQLs?
- How many leads convert into opportunities?
- How many of those opportunities close as new deals?
- What’s the typical value/revenue of a new deal?
2. Know Your Operational Costs
Determining the actual cost of the product is important. It is your direct investment that needs to be returned with the optimum level of profits for further running the business efficiently. This is how you can easily evaluate your business operational costs:
- The cost of time and labour involved to deliver contracts?
- Bandwidth and qualification of your staff to do the particular given task.
- Cost of agencies associated to deliver a particular ask?
3. Set Your Marketing Budget Based on Business Goals
The below written questions can easily help you in determining the accurate business budget. Set your business goals by asking yourself the following questions:
- Determine your business objectives for the quarter?
- Question your business objectives for the year?
Businesses on an average spend 7-8% of their revenue on marketing. This percentage might vary from business to business depending upon their size and structure. This then you need to split between brand development costs such as websites, blogs, sales collateral, and promotion costs, as well as campaigns, advertising, and events. Never decide your marketing budget after covering all other business expenses.
4. Marketing is an Investment, Not an extra Cost
Mostly, marketing budgets are ordered from the top of the organization where marketing teams, that are considered as cost centers. And, the marketing budget is perceived to be an extra expense. Carrying forward with the similar mindset, organizations tend to look at previous year’s expenditure and then make minor changes, depending upon the trend change in the market. Whereas, this should be the last used resort for the organization. Marketing budget should be treated as investments, rather than expenditures.
5. Evaluate Your Growth Stage
Setting your marketing budget will majorly be influenced by the growth stage of your organization. Understand, whether your organization is in growth mode or planning mode.
If you’re an organization which is in growth mode, you’ll then be needing to generate top-line revenue at a faster rate. Therefore, for an organization like yours, you might consider deeper investments in more of the quick-win marketing techniques.
Consider an online invoicing software for your business, it will help you keep a clear track of all your account payables and receivables. Therefore, giving you a fair idea to forecast finances easily. apart ,from letting you forecast finances, an online invoicing system also helps you keep a track of your marketing budget and managing work flow efficiently. Online invoicing softwares, such as Invoicera with added features of work time trackers and employee management lets you delegate and manage work smoothly.
If you’re in more of a planning mode, where steady growth is more welcomed than spikes in revenue, you’ll want to consider a longer-term marketing play through earned media. This includes generating and publishing great inbound content and eventually earning new business over time.
6. Study Trends: Current and Future
A clear understanding about current and future marketing trends are useful in navigating the budgeting process.
While setting the marketing budget, it is of utmost importance for marketers to adapt and apply different technologies to their marketing decks to stay strong with the pace of industry changes. Make sure to take full advantages of all the features that you re using in your marketing process.
Many times companies decide on using the latest marketing idea even without validating and researching about the success of it to reach their specific target market. Any marketing budget should always consist of traditional market approaches as well as the emerging social media market. Focus on your target audience, what form of communication they are likely to respond to, and what your message to them should be.
As quoted by Larry Page, co-founder of Google once, Always deliver more than expected. It is important to stay a step ahead than what your consumer expects. Delivering high value holds as much importance as creating right attitude towards product with marketing. As fruitful as it is, the process is complex too. In order to eliminate some complexity from the entire task and managing a healthy cash flow, it is important t opt for an online invoicing software. It helps you build enitre project without any obstacles.