You’re off to a great start this year, and you’re ready to invest more in marketing your startup or small business. Only, you’ve never actually created a marketing budget, you’ve always sort of winged it. Let this be the year you get serious about your marketing plan and spending! Use these tips to help create a marketing budget that will help reach more potential customers.
- Start by getting to know your audience
Before creating a budget, you have to know which marketing channels you want to use to reach your audience. And you can’t do that until you really dive into who your customers are.
How old is your average customer? What’s her income? Where does she live? Most importantly, where does she go to interact with brands like yours?
You can get this information by researching your industry in general online, as well as conducting surveys with existing customers.
- Develop your marketing plan
Now that you know your audience a bit better, you probably have an idea of where you want to connect with them.
Will you post regularly on social media, or even invest in social media ads? Will you hire a content writer to help with your content marketing? What about email marketing? Offline advertising?
These are all components that need to go into your marketing plan. List out how you plan to use each channel.
- Email marketing: send leads from website introductory offer; send monthly promotion to list
- Social media: update daily. Test out Facebook Advertising for popular posts
- Content marketing: post to blog three days a week
- Research costs
The next step of creating a marketing budget is knowing what these components cost. Some will be free, but will cost in time, whether you or one of your staff handle them. You’ll have to decide which you have more of: time to learn how to do your own marketing, or money to hire someone else to handle it. Most startups find a balance between the two.
Let’s look at email marketing as an example. Maybe you plan to sign up for MailChimp’s $10 a month plan. You decide you can handle writing the content and putting the emails together, but you want to hire a designer to create a customized template with your logo that you can reuse. That will cost you $300. So your budget for this marketing element would be:
- $300 (one-time cost) + $10 a month (or $120 for the year) = $420 in email marketing costs for the year
You can do the same with the other aspects of your marketing plan.
- Lay out those costs
Once you’ve researched what all of the marketing channels will cost to use for the year, look at your marketing plan as a whole. Can you afford to do it all, or do you need to pull back?
Knowing that some costs, like a monthly subscription to email marketing services, can be paid monthly may make it easier on your budget, while others, like that fixed designer cost, will make a blow to your bottom line all at once.
You can also look for ways to save money. Some software companies give you a break if you pay for a year up front, so you’ll pay less in the long run if you can pay that way. Your designer might lower her rate if you know you’ll need regular projects from her.
- Test, measure and modify
The great thing about your marketing budget is that it’s not carved in stone. If you’re trying something new, like social media advertising, test it out for a few months and see what the results are. If you’re generating the ROI you want, then you can continue to invest (maybe even increasing that investment if you can afford it). If it’s providing lackluster results, pull away from that tool and reinvest the money in what is working.
The key here is monitoring your marketing efforts. However, realize that some things, like content marketing, may not show a direct return on investment because they’re more about branding, not making instant sales.
Trust your gut! If you feel like something isn’t working, ditch it. There’s no rule that says you have to stick to your marketing plan or budget for the entire year if it’s not helping you achieve your goals.