How to Create a Marketing Budget for 2017
A new year is just around the corner, which means new sales goals, new customers and new opportunities. In order to continue developing your business, you need a marketing budget that accommodates this growth.
The way that many businesses determine their new marketing budget is by assessing what they spent last year and what they are willing to spend in the coming year. Unfortunately, this isn’t the most effective way to determine your budget, and it can hold you back from achieving your goals.
Planning and implementing a marketing budget doesn’t have to be difficult, but it does deserve some thought. Let’s discuss some of the ways you can best determine a marketing budget that aligns with your goals.
Start with a Marketing Strategy
Before you start with a budget, create a marketing strategy. This way, you have clear business goals to align your budget with. If you plan to increase sales by 10%, you need to be willing to invest enough money to achieve this. If you’re not willing to spend that kind of money, adjust your goals to something you’re more comfortable with.
It’s also important that you discuss your marketing agenda with the entire team – sales, marketing, etc. Everyone needs to be working toward the same goals, otherwise your resources won’t be utilized appropriately.
Determine Your Budget
Once you’ve outlined your marketing strategy, create a budget that is realistic. Rather than setting specific dollar amounts, use percentages to help meet your goals. This setup will probably be easier for your teams to understand as well.
For example, if you only care to maintain your current market position, 1-2% of your top-line growth will be sufficient. This “lean plan” should be enough money to retain customers and manage your position, but it won’t be enough to grow your business.
If you have more ambitious goals for your company, a “target plan” is more suitable. This plan uses 3-4% of your top-line revenue and includes things like attracting new prospects and retaining current customers. New tools and strategies should also be adopted to increase market share. Generally, businesses following this plan see 10% annual growth or more.
A “stretch plan” uses 5% or more of your top-line revenue. This may sound like a lot, but it’s what’s needed to successfully grow your business by driving more leads, conversions and sales. To do this, you’ll need to take advantage of the latest tools and technologies. The payoffs are huge when done right. Companies can see 20% annual growth or more.
Allocate Your Dollars
Now it’s time to decide how much of your budget is going where. You get to really dig into the aspects of your marketing plan that you want to pursue. Some of the key areas to think about include:
- SEO and paid advertising
- Social media
- Content offers and blogging
- Email marketing
- Lead nurturing and conversion
- Traditional advertising
What you want to spend on each category is up to you, but we recommend focusing on your goals, your industry and what your competitors are doing. For example, if you feel that your presence on social media is lacking and you want to increase conversions, allocating more money to social media is the best direction.
If you want some insight, Forrester Research estimates that B2B businesses will spend nearly $86,000 on digital marketing in 2017. The most will go to search marketing, followed by display advertising, social media and email marketing.
Implement a Marketing Budget Plan
The final piece to the puzzle is implementing your budget plan accordingly. It would seem that this step would be the easiest, especially if you allocated everything correctly, but it takes a qualified team to make this happen.
Your marketing team should consist of individuals who possess skills in copywriting, coding, design, paid search, social media and SEO. No single person can do all of this, so you’ll need a well-rounded team to build out your marketing department.
The trouble is that hiring specific individuals who specialize in these areas gets expensive. Benefits, training and equipment add up quickly, and most smaller businesses find themselves in a position where they can’t financially build an in-house marketing team of their own. Fortunately, there is a solution: outsourcing your needs.
Outsource Some or All Marketing Needs
Outsourcing advertising needs to a digital marketing firm is an option that works for many businesses, particularly small to medium ones. You get access to an entire team of specialists without having to pay their salaries, benefits or training. Also, you don’t have to worry about managing additional employees.
The costs for hiring a marketing agency are predictable since you pay the same fees every month. It’s also nice to know that your business is following the best practices and keeping up with the competition rather than dragging behind. Communication is sometimes a bit slower than if you were to have these individuals working in your office, but the best agencies do an excellent job of responding to emails and phone calls in reasonable time frames.
Don’t forget that you can also save money by hiring freelancers for some of your projects. Freelancers work on a project-by-project basis so you don’t have to pay them a full salary or benefits. They fill in the gaps that lack from your marketing team, and they can be lifesavers when you’re in a bind.
It takes time to create an effective marketing budget, but you’ll be glad you did. Businesses that are realistic about their goals and the investment that is needed to reach them are typically most successful. For reasonable, effective marketing services, give WSI Net Advantage a call at 510-687-9737. We’d love to discuss your current marketing budget and how to make your dollars go further in 2017. With a free consultation, it’s worth it to get some information from us!