How many times have you gone to the store, walked by the ice cream, and picked up a pint … or ten?
You’re sure you’ve run out at home, only to find out that you still have several in your freezer.
Oh well, more creamy goodness for your cheat meal on Saturday! 😉
We see the same thing happen every day with businesses and organizations we meet for the first time.
We sit down with them to talk about their marketing needs, the meeting starts, and we’re told the company isn’t doing any marketing. Five or 10 minutes into the conversation and they suddenly remember hiring ABC to take care of XYZ for them and go, “I wonder how that’s doing?”
As we get more and more into the meeting they now remember about XYZ doing ABC for them, wait, was that AEO or was it ABC doing CBA? By the next meeting, they may even remember a few more things and come to the realization that they’re not following a good marketing plan and their budget is being spent haphazardly. A lot of businesses make these mistakes. Let’s take a look at a couple of the most common mistakes we’ve seen.
Common mistake #1: Operating in silos
If you’ve heard the term “operating in silos” before, then you know it’s not considered to be a good thing. The metaphor refers to people or groups that don’t share information or cohesively work together. This type of mentality will reduce the efficiency of the overall operation, reduce morale, and may contribute to the demise of a productive company culture.
When I think of “silos,” the image of those giant towers on a farm that are used to store grain always comes to my mind. A place to store food for future use, except the idea shouldn’t be to hoard, but to share. As a matter of fact, farmers have to consider spoilage of the food, and silos allow them to store food in a controlled environment until the time comes when it’s needed.
You can apply that same concept to your business. Companies can store information in a controlled way so employees can access it when needed. But sharing and working cohesively towards a common goal will help prevent the demise of a productive business culture.
Common mistake #2: Duplicating work
This happens more often than you may think: several people both inside and outside the company doing the same thing without you knowing exactly what’s going on.
You can’t afford to make these mistakes. Without marketing, the news of your amazing, life-changing product or service will never reach your potential customers. Any successful business — big or small — makes sure their marketing efforts are planned out so that they use their budget wisely.
This no-nonsense guide will help you take a look at your revenue and draft an appropriate budget for your business’s needs.
Common mistake #3: Canned content without analyzing your industry’s market
The perfect marketing budget for your small business is going to be completely unique, just like a fingerprint — but following market trends and comparing your business with others in your industry will help you understand and plan an effective strategy for allocating money to your marketing.
The economy is unpredictable, and marketing budgets across economic sectors have periodically risen and fallen. Plenty of companies go way over the industry average budget in an attempt to increase their market share, and many other companies have budgets below the average that look forward to modest financial growth in favor of other developments. It is very important that you do some research on what your industry as a whole is devoting to marketing efforts while you develop your own marketing financial plan.
Common mistake #4: Miscalculating your percentage
But don’t just follow economic trends; your budget should also be affected by the longevity of your business and your average annual income.
Young businesses, one to five years old, are usually a bit more aggressive with their marketing efforts. These companies are a little less profitable than older and already established businesses. They have to rely much more on brand recognition and reputation. A company that devotes a bigger percentage to marketing is likely to attract an audience more quickly, gaining the rewards for its efforts.
Meanwhile, older enterprises that have five or more years under their belts have likely already succeeded in establishing brand awareness and cultivating a lucrative customer base. Most of the legwork of marketing has already been done, and budgets are more flexible and allowed to change their size according to the business needs.
If you are planning on opening a brand-new business — a small one, that has yet to make a profit — the calculations have to be a lot more specific. Like younger firms, you likely want to devote a bigger portion of your resources to marketing strategies, but what percentage exactly depends entirely on your working capital.
Where to allocate your marketing budget
Finally, deciding how much money to devote to marketing is a major step, but an even more complex issue — with a much bigger impact on the success of your business — is when, where, and how to spend your marketing budget.
Marketing is a diverse field, especially as more consumers take to the internet to start their decision journey. The internet continues to push traditional marketing strategies into obsoletion, so make sure you’re spending your budget on the strategies with the highest ROI. According to webstrategies, in 2016, the average firm was expected to allocate 30% of their marketing budget to online sources, and this rate is expected to grow to 35% by 2019.
As to how your online budget should be distributed, Forrester Research, a market research company, has provided us with a few industry insights:
- Search engine and display marketing. This includes SEO, keyword optimization, banner ads, and remarketing, and requires the most significant online spending, capturing about a quarter of a business’s total marketing budgets. I’ve personally seen businesses that were on the dreaded page 2 of a search query go all the way to the first position on the first page after allocating resources to paid search.
- Content and visual marketing. Finding ways to integrate promotional content creation into your day-to-day activities will save you time and money. When you start thinking creatively in terms of content, everything you do will be a conversation piece, a photo, or a post that will keep your target market talking about you.
- Social media marketing is relatively cheap but not free, unfortunately. Take the most popular social network in the United States, Facebook, as an example. The days of effective free advertising via Facebook are gone. The good news is that advertising on Facebook and boosting posts are both highly effective and affordable strategies.
Marketing drives revenue
After all is said and done, in most successful businesses, marketing will drive your revenue instead of the other way around. Remember, first you need to consider where you stand as a business, how long you’ve been around, and how well you are known in your industry. After that, you should define what percentage of your budget will go towards your marketing and allocate those funds accordingly.
Always keep in mind that your marketing and advertising spending is task- or project-oriented. Task-oriented marketing means having a plan, something that 10 out of 10 marketing experts strongly recommend. To make sure you’re taking complete advantage of your marketing budget, you need to have both long-term and short-term plans to make sure you are staying proactive in reaching your goals.
At 8 Signal, we’re all about outsmarting and not outspending your competition. So feel free to give us a call at (915) 585-1919 or fill out our online form to have one of our marketing experts contact you.