Now that you’ve developed your killer marketing plan in part one of this series, the next step is to determine how to pay for your marketing campaigns. Part one of this series focused on the development of your marketing plan. To execute it, you’ll need an allocated budget.
Creating a budget isn’t the most fun and exciting part of marketing. However, it’s essential to take the time to plan and determine how much money you can spend. Developing a budget will ensure you’re set up for success as you execute your plans and move your business forward.
Additionally, it’ll help you have realistic expectations and prioritize all of your resources. Dumping a ton of money into your marketing campaigns may seem like a good idea. In reality, you don’t have to do that to market your business successfully. You need to make strategic choices when deciding what to spend your budget on and whether or not those activities will generate results.
This blog will go over the five steps you need to follow to set up a marketing budget.
1. Look at Your Sales Goals
One of the first things you need to do is compare your marketing costs to the number of sales you have to generate to get your cost of marketing per customer. Your sales and marketing costs need to complement each other. Your marketing activities need to focus on generating the number of sales leads to make your financial projections.
One way you can do this is to figure out a 30-day sales goal for your monthly marketing plans. You don’t want to overspend on your marketing campaigns if you cannot make that money up in your sales. You want to do more than simply break even with your sales and marketing costs. You want to generate revenue.
2. Develop Ways to Measure the ROI of Your Marketing Campaigns
You’ll need to determine the highest possible return on investment (ROI) on each marketing dollar you spend. ROI is the amount of money you get back from the dollars you put into executing your killer marketing campaigns. If any of the tactics you’re using – coupons, events, direct mail, or social media – aren’t providing a return, then you shouldn’t continue to spend money on them.
3. Measure Your Cost per Acquisition
Calculate the rate at which you can convert leads into sales. Then, determine what resources you need to generate that number of new leads. For example, maybe you spend $100 each month to create Facebook ads to target your prospective customers. The ads generate 100 leads, which you determine from how many people click on the ad and visit your website to signup to learn more about your company. From those 100 leads, 50 of them become paying customers. Your cost per acquisition in this scenario is $2.
4. Track the Results of Your Marketing Campaigns
You might have your heart set on a specific marketing static, but it may not support your overall business. The numbers also might not be working in your favor. If that’s the case, stop that tactic and try something else. You need to remain flexible to change with the market conditions.
For example, Facebook may change its algorithms in a way that makes it difficult for people to see your social media updates on their newsfeed. Unfortunately, you can’t control the algorithms. If this happens and you notice a decrease in interaction with your posts, be flexible enough to change your marketing strategy to another tactic.
5. Allocate Funding for Future Marketing Efforts
Attracting new and retaining current customers is a continuous process. Over time, the same marketing tactics will get boring and won’t continue to yield the same results. As you progress through your campaign, ensure that you budget for future marketing projects that attract new customers. Don’t rely on the same tactics forever when different, better, and possibly cheaper ways to attract new leads are available.
Determine Your Marketing Budget to Execute Your Marketing Tactics
Many components go into developing a killer marketing plan, and your budget needs to be essential. Knowing how much you have to spend and where you should allocate those funds will ensure that you’re spending your money wisely. You don’t want to keep funding a marketing tactic that does not generate new leads or generate sales.
What are some marketing tactics you employ that bring in revenue for your business? Drop a comment below!