Let’s face it: you’ve got big plans for your business in 2023.
You want to grow your customer base, generate more revenue, and develop new offers. But how do you get there? There are many paths to success, but marketing is non-negotiable if you want to scale your company. This crucial investment is the key to long-term growth – but just how much should you be spending? If you’re not sure where to start with your marketing budget, here are several things to consider before deciding how much money to put into this important aspect of your business:
Plan for today, and plan for tomorrow.
Where do you see your organization in 5, 10, 15 years? If you’re planning for more than just the next few months, then it’s important to think about how your marketing strategy fits into the larger vision for your company.
The most successful marketing initiatives are built with long-term goals in mind. Without considering the long-term impact you are looking to create, you may end up with a short-sighted approach and ineffective campaigns.
This isn’t to say you need to know exactly what’s ahead of you – plans are meant to change. Good marketing is flexible, and good brands take time to develop. But forward thinking can greatly set you apart from competitors. That’s why we start with strategy.
Start with an effective marketing strategy that meets your needs.
In order to choose the right marketing strategy, you need to consider your company’s specific needs and goals.
Do you want to expand your reach? In this case you’ll need to opt for broader marketing campaigns that target a wider range of customers. This may cost more than a narrowly targeted campaign. However, it will have higher returns if it leads to increased sales and revenue.
Maybe, you are wanting to improve customer loyalty or increase repeat business. Retention marketing strategies might include loyalty programs or referral programs. These are relatively inexpensive and will require a different level of budget than some of the heavier marketing strategies.
If you want to plan an effective marketing strategy, consider enlisting expert help. You can work with a marketing consulting firm or marketing agency that will carry out research, get to know your business and its challenges, and develop a customized, realistic plan for your company. By starting with strategy, you can ensure your marketing dollars will be put into the initiatives that are the most likely to generate results, leading to more efficiency and higher return on investment.
What do companies spend on average?
It’s generally recommended that B2B companies allocate a significant portion of their budget to marketing efforts to sustain their business. According to the 2020-2021 B2B Marketing Budget Benchmarks report from DemandWave, the average marketing budget for B2B companies is about 21% of overall revenue. Many B2B companies will spend within the range of as little as 5% to 25% of their revenue on marketing.
You may want to research industry benchmarks for your own industry, and consider what other companies are spending on marketing. According to Clutch, B2B SaaS companies spend around 10% of revenue on marketing, and the average B2B service business spends around 9% of revenue on marketing.
If you have large growth targets, you will want to dedicate a larger portion of your budget towards marketing.
Consider outsourced marketing.
Outsourced marketers, like marketing agencies, web design agencies, content marketing agencies, or marketing consultants, may offer better experience or connections within their industry than you could build as an in-house resource. They are also generally more scalable. For example if your business starts to grow very quickly or starts receiving lots of new leads, an agency can scale up its employees much faster than an internal team would be able to do so on its own.
Successful marketing requires collaboration from several different kinds of marketing professionals.
Typically, agencies employee creatives and marketers with a variety of skillsets. Rather than hiring a web designer, developer, copywriter, graphic designer, social media manager and marketing strategist, you can access all of that talent for costs that would be significantly less expensive than putting a whole team on payroll.
This makes hiring a marketing agency to handle your website design, social media, blog, video marketing or SEO a financially sound choice for many businesses.
Marketing is an investment, not an expense.
Marketing is an investment, not an expense.
Don’t look at marketing as something you need to cut back on when times are tough—look at it as a way to build upon your success and grow your business. If done right, this will become one of the most important things you do for your company.
The right strategy will help a business stand out in a crowded marketplace, differentiate itself from competitors, and build a loyal customer base. This can help a business build long-term value and create a competitive advantage.
Even with the expenses considered, the potential benefits of a well-planned and executed marketing strategy can make it a worthwhile investment for businesses of all sizes– whether you are a start up, a local small business or a growing B2B enterprise.
Not a One Size Fits All
At the end of the day, marketing budgeting is not one-size-fits-all. Every company will need to evaluate their resources, goals, and expected ROI to determine what the best budget is for their needs.
It’s crucial to have a strategy in place – one that will give you the best chance of success. This means thinking about your current needs as well as what may come in the future, and then working with expert marketers to create a plan that meets those requirements.
With the right budget and strategy, your company can increase brand awareness, build demand, attract new customers and drive sales. A worthwhile investment.