Hey, hi, hello — this marketing firm in Nashville is about to drop some real knowledge on you. Raise your hand if you’ve ever wondered how much you should be spending on marketing.
Yeah, you’re not alone. So many of our clients come to us with a fuzzy understanding of what marketing costs and how much they should be spending per month and per year.
And then there’s the question of return. What should you expect in return for your marketing spend? Is there a standard ROI to be expected?
Today, we’re going to shed some light on these questions. We’re also going to talk about when you should absolutely cut marketing and when you should get off your wallet.
So, before we even get into cutting the budget, how do you know what a reasonable budget should be? According to one article, “The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin — after all expenses — is in the 10 percent to 12 percent range.”
Simple, right? Well, as you know, nothing’s that cut and dried in running a business. The percentage spend on marketing efforts varies at different stages of the business. For example, for a new business that’s seeking to grow, you should plan to allocate 12-20% of revenue toward marketing.
Additionally, when you have a special project that arises, you should boost your marketing spend to drive goals.
So, let’s pause for a moment and take a gut check. Before beginning to consider cutting your marketing budget, are you spending enough to start?
Now, let’s get into a few reasons why you might want to scale back on your marketing spend.
When we market a client, we are engaging in efforts on an ongoing basis.We are driving traffic to their website, their social platforms, to tracking phone numbers, through their doors, and wherever else. We need to get people to places where they can make a purchasing decision (or just to be aware of your business and offerings).
Once the person reaches you (and by you we mean your store, your employees, your website, your social pages, etc.), it’s up to you to convert the browser to a buyer.
However, if the foundation is not firm, we could be driving tons of traffic and you could still struggle to get the business.
This is one of the most heartbreaking things for a marketer. It takes effort — and a lot of it — to get people to answer the call to action. So, when we get people all the way to you and then what you’ve got going on turns them off, it’s a major letdown.
This can most often be seen in situations where the website is in dire need of a refresh. Or when your store is a bit outdated or your employees aren’t skilled.
We will leave the store and staff to you, but when it comes to your logo, website, social platforms, and all other branded collateral, we want to make sure your ducks are in a row before we begin pumping funds into showing them off.
With our clients, we start with foundational branding. Here, our marketing firm in Nashville defines the company’s positioning, attributes, and visual direction. And then we weave these through each and every single thing that a customer might encounter.
This way, the ads that drive the traffic align perfectly with what the customer can expect when they arrive at the point of purchase. It just makes sense.
So, if you’re pushing people to something that’s not the best representation of your firm, just pump the brakes and call the experts to get you fixed up.
Here’s another reason to slow your roll when it comes to spending money on marketing. If you’re running ads and throwing up billboards and publishing posts on social, you’d better make sure you know why.
Why are you putting out what you’re putting out, and how are you going to measure whether your efforts are effective?
Before you start signing on for all of the advertising, set out some SMART goals. For those who haven’t heard, the acronym SMART refers to Specific, Measurable, Attainable, Relevant, and Time-Bound goals. Don’t be vague; don’t have your head in the clouds. Make sure that what you’re striving for can be accomplished, and then ensure that all marketing efforts align with those goals.
Finally, set up a system to report on your efforts and how they moved the needle toward achieving your goals. This will allow you to see incremental change and take note of trends. You’ll also see what’s not working, so you can reallocate funds to another initiative if something is really not cutting the mustard for you.
Here we go talking about goals again. But, seriously, you’ve got one more checkpoint to investigate. Practically speaking, your marketing is at the top of the sales funnel, looking to attract customers and clients with your key messaging and positioning. But what happens when that lead gets into the hands of your sales team?
Is your salesperson speaking the same language as your marketing team? If not, the lead will likely be difficult to qualify and potentially confused or turned off by the conflicting message. This is obvious, and with a strong foundation in place (see #1) you can start to convey your position and messaging to your entire team, which will help ensure that everyone is speaking the same language.
OK, let’s wrap this up. We hope that here you’ve caught on that we really don’t want you to slash your marketing budget. Instead, we encourage you to take a look at where you’re driving traffic, what you’re hoping to come from the efforts, and what the results are. This way, you won’t find a need to cut the budget. Instead, you’ll reap the benefits of a marketing plan gone right.
If you’re wondering how in the heck you can get all this done, never fear. The Nice Girls are here. Give us a shout, and our marketing firm in Nashville will help you out.
Get Your Nice Swag On.