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How much should I spend on marketing?
Here’s a question often asked by corporate marketers and better Marketing Consultants in Los Angeles and elsewhere… What is your marketing budget for the year?
Well many small to medium size businesses don’t have any idea how much they need to spend and this can be a barrier to growth.
For a marketing plan to be effective it’s important to understand the business goals and what funds will be available. This will help determine the scope of the marketing activities.
Usually, the marketing budget is a based off a % of the expected net revenue for the year. That % can be lowered or increased depending on the type of business/product/service and its life stage. For example, new products often require a bigger % to fund the launch.
Once the budget is determined it needs to be allocated across all the appropriate line items, eg. advertising, promotions, social, CRM, sales co-op, content development, research, etc.
The number of line items or activities is usually related to the size of the marketing spend and with smaller budgets it’s advisable to focus efforts on just a few to make a bigger impact versus diluting it across many.
As the months go by it’s important to track expenditure against the budget and to fine-tune by increasing or reducing line item spends as necessary.
So, don’t let the lack of a budget inhibit your growth. Get started today.
Rich is a highly skilled marketer and passionate entrepreneur who loves to solve problems and grow things, whether it's brands for global companies like Mattel, Pizza Hut, and 20th Century Fox or high value customers for local startups. Rich hates exams but he somehow managed to get a BA in Business Studies, a Masters in Marketing and is Google certified for Analytics and Adwords. Did I mention he's a partner at Custom Marketing and pro-photographer?