Managing Your Marketing Budget is About Outsmarting, not Outspending

17314687602_76dfaea22b_zThis happened to me many moons ago in college: I arrived at school, books in my backpack, laptop in my hand, ready to take on the world.

Or so I thought.

I sat down and asked the girl sitting next to me if we had any homework or assignments pending. She stared at me for a couple of seconds and said: “There’s an exam today, dude.”

WHAT? I couldn’t believe it!

How could I forget something as important as an exam? I thought I was prepared but it turns out I had everything except my calculator, #2 pencil, and scantron form. I had everything except for what I actually needed.

It happens to everyone I know. We get overwhelmed sometimes and forget things. Being in college means we need to register for classes months in advance if we want to keep a somewhat decent schedule to be able to juggle work and school.

We have to buy books before classes start if we want to know what the teacher will be talking about in the first lecture, and we need to copy the syllabus into our schedules for the next 6 months so we don’t miss any important projects or tests.

College students aren’t the only ones that have a lot on their plates. Business owners have even more, and the stakes are definitely higher. As a business owner, if you forget something, you won’t just get a bad grade and be able to make up for it on the next test or with an extra credit essay—you’ll be losing money and time. The future of your business is on the line, not just your GPA.

That’s why it is important to have a cohesive plan to track every detail of your marketing plan, and your marketing budget.

We’ve seen it before. We sit down to talk with a client and get to know them better so we can provide the best for their needs. The conversation often starts with them saying they’re not doing any marketing, and as we get further along they suddenly remember that they actually had hired someone to take care of their social media, but they don’t really know how that’s going.

A few more minutes pass, we’re still talking, and suddenly they realize they’ve had this conversation before and had also hired someone else to manage their PPC ads.

Developing and managing your marketing budget is something you have to do so you can know where you’re spending your money.

You need to have a budget so you can keep track of your marketing efforts and see how the return on your investment is doing.

It’s a common mistake for entrepreneurs. They will work on building an identity for their business, but not actually plan the budget to implement it. They have the car, but not the money to put gas in the tank.

Marketing has an effect on most areas of your business, so your marketing budget is critical to the success of your business. I’ve heard a lot of people say that marketing and advertising are the same thing, but they certainly are not.

Marketing is so much more than just putting yourself out there with advertising and promos, and your budget must cover all areas of planning, targeting, and distributing your message. That is, if you want to stay competitive and maximize your profits.

Another common mistake business owners make is trying to reach out to everyone. By stretching yourself too thin, you won’t maximize the results of your marketing strategy. Your message resonates only with the people who matter: those who are ready to buy what you’re selling.

I’ll tell you the secret to launching a successful marketing campaign right now that won’t break the bank:

Try to reach your audience when they’re most receptive and focus on high-return activities.

Should you spend part of your budget on marketing your business online? Yes. Should you promote your business on every social network? Not really. To get the most bang for your buck, you need to optimize your reach and market your company in the places where your best prospects spend their time.

Who Should You Advertise To?

Like I said, one of the most common mistakes business owners make when trying to bring in customers is that they think showing their advertisements to as many people as possible will get them these results. This is not the smartest way to use your budget.24737072610_7f1551290f_z

I was recently reading about fine dining in NYC and stumbled upon the King Cole Bar at the St. Regis hotel, where “the most exclusive table in New York” can cost you around $2500 just for a one night reservation. Suppose you own a high end place like this. Would you advertise to 1,000 people from the general public, or would you rather show your ad to 500 people that have the means to afford what you offer? As you can see, marketing is not about showing your ads to as many people as you can.

Out of the 1,000 people from the general public, maybe one of them can afford to eat at your restaurant, and you’ll be lucky to get 1 sale. But if you speak to the 500 that can indulge once in awhile, even though you only expose your services to 500 people, you will get a bigger response.

You see what I mean? You don’t just want to tell people about yourself. You want to bring in the right kind of people—the people that are the most likely to become customers. The quality of the market you advertise to is more important than the number of people you advertise to.

Sync your budget with your goals

How much of your budget you spend and where you spend it will always depend on what your goals are. This is particularly true when it comes to paid advertising like search and display ads in search engines and social media ads like Facebook and Instagram.

Your marketing expenses will also change depending on how wide of an audience you are attempting to reach. Take a look at Google’s AdWords for example. You have the option to target your campaigns based on users’ locations, languages, and the keywords they search for. Locations and languages are a much broader filter, whereas a smaller number of users are searching for any given keyword; therefore your location/language-based audience is going to be much larger and require a larger budget.

It’s important to know your audience, to meet the perfect ambassador for your business. Once you have an idea of your market, everything else falls into place.

Do your research

417196687_e103ef0850_zDoing your research doesn’t have to cost a lot, but it’s still one of the most important parts of any marketing campaign. If you don’t conduct thorough research before anything else, you won’t know where to focus your marketing budget, and that’s always a recipe for a poor return on your investments.

To get started, get to know your audience, analyze your past strategies to find out what works and what doesn’t, learn from what your competitors are doing, create surveys for your current customers, and determine which social networks are most effective for your industry. Pay attention to what your prospects read, where they spend time, and what types of media they react to. This research will serve as the foundation of your campaign and can cost nothing but time.

Of course there are resources out there on which you could spend some of your marketing budget, but there’s also more than enough free information out there to help get your strategy off the ground.

Your ideal clients are your current customers

These people have already taken out their wallets and opened up their purses to give their money to you. There’s a reason why they’ve done this and you need to find it. What exactly makes them different from the rest?

If you want to become an even more successful business owner, it’s time to stop chasing after those billionaire fantasy clients who may or may never come. Focus your attention on your existing customers.

Who are these people that have already paid you for your product or service? What are they looking for? How can you create a better customer experience for them and attract more people like them to you? These are the customers you need to attract, these are your ideal customers.

It’s not about how much you spend

6757849129_54c4f1ab10_zI’m sure you’ve heard the saying, “You must spend money to make money.” I’m here to tell you that it’s not always like that. Don’t think that checking every box on your budget expenses will mean you’ll get the biggest return. We’re not advocates for an “always spend more” approach to marketing. We’re all about an “always spend smart” approach.

Truth is that spending more or less in marketing may or may not be the key to bringing in more business. As you’ll learn, effective marketing strategies require you to deliver the right message to the right people at the right time in the right way.

Simply having more ads or a bigger budget are not ways to bring in more business. Instead, ask yourself, How effective are your PPC ads? Are you advertising in the right place? Who is seeing your ads? Are these people the best customers for you?

Effective web marketing does not have to be expensive. If your marketing is done right and done methodically, you’ll be able to see results without breaking the bank.

Marketing is a lot more than just advertising and selling. Providing an excellent and unique customer experience plays a huge part in your strategy; this will differentiate you from the rest of your competitors.

In the end, the strategies you choose to invest in may be different, and they should be! Every business and every target audience is different. What works for one market segment may fall flat with another, which is why research and ongoing testing are important. What I want you to walk away knowing is that your marketing strategy doesn’t have to be expensive for it to be effective.

8 Signal is your marketing department without the overhead. Call us at (915) 585-1919 or fill out our online form to have one of our experts get in contact with you. We believe in helping businesses outsmart, rather than outspend, their competition.

Photos courtesy of: brianc, Adam Jones, Ph.D. – Global Photo Archive, Ryan Dickey, 401(K) 2013.