How to Get More Marketing Budget
Promoting your business is crucial to its success. Your audience needs to know about your product or service before buying it, and marketing is how you spread the word.
Investing in an effective strategy is necessary. Sometimes, it can be challenging to know how much a budget should be and how to get more when you need to boost your efforts.
In this post, we’ll discuss where your promotional spending levels should be and the best ways to secure an increase when you need it.
How do I determine what my marketing spend should be?
To know if your allotment is high enough to be effective, you need to know where it should be. Three primary guidelines exist to determine your marketing budget — the industry, business age, and level of professional help you want or need to execute your plans.
Marketing budgets by industry
Like profit margins, marketing budgets tend to be similar among businesses in the same industry. A packaged goods retailer may operate with a budget 24% of their revenue, while transportation companies invest closer to 8%.
The industry averages serve as a benchmark — sthey give you an idea of what allocation to expect.
Marketing budgets for start-ups
Prelaunch may be the most challenging time to determine a budget. While businesses with a track record of sales can look to their revenue and follow generally accepted standards, a start-up doesn’t have that luxury. In this scenario, you’ll rely on research and informed projections.
Say you’re going to open an ecommerce store selling gourmet coffees. You’ll want to know how much the average store like yours generates each year and use the figure to calculate a minimum starting spend.
You’ll also have to account for other marketing expenses that more established companies have already incurred, such as website development. You also need to invest in branding, like designing a logo. In this case, your initial spend may have to exceed industry averages to have enough left for promotional activities.
Marketing budgets for established businesses
Businesses that have been around for a year or more have their revenue numbers to use rather than projections. Those ages one through five may invest more than those ages six or older as they compete for market share and establish themselves within their industry.
In general, the Small Business Administration (SBA) recommends businesses with annual revenue under $5 million should plan a marketing budget of 7 to 8% of sales.
Four tips for getting more marketing dollars
Now that you have an idea of how much to spend, how do you increase the budget? Here are some tips for requesting a budget increase.
- Set SMART goals around revenue
Having a plan isn’t enough — you need to have revenue-based goals to quantify your actions. For example, an ecommerce store can set goals to get more sales and increase average order value.
That’s where the SMART acronym comes into play. SMART stands for:
- Specific: Make sure your goals are clear and focused. Include as much detail as possible.
- Measurable: Understand the difference between valuable analytics and vanity metrics. Choose the right key performance indicators (KPIs) to track for results.
- Achievable: Set practical, realistic goals to keep everyone engaged and accountable.
- Relevant: Tie your goals to pertinent business objectives your organization wants to achieve.
- Timely: Give yourself a deadline for measurement and achievement.
- Appeal to pain points
You need to know what makes your target audience tick. In this scenario, they’re the person or people controlling your revenue. Like any other audience, they have wants and needs.
Understanding their pain points can help you make your pitch stronger. You can anticipate their objections and have data to overcome them.
- Have a solid “why”
When you make your pitch, you need to know why. Make sure you know what you’re asking for and can explain its justification. For most, this means having accurate projections of the impact an increased budget will have. A SWOT analysis can help with forming why your business needs to invest a certain amount in marketing.
As a marketer, it’s also part of your responsibility to be aware of trends to help inform your “why.”
Companies that set the bar higher in their social media marketing establish new customer expectations. Changes in search engine operation affect approaches to content marketing and search engine optimization (SEO). Persuading the purse-holders to take advantage of these shifts with a larger investment becomes easier with accurate predictions and relevant data.
- Showcase existing data
If you’ve maximized your current budget, you know your marketing efforts’ return on investment (ROI). Linking your audience to channels to show how your actions generate revenue will encourage approval for more money. You can also research average costs for different strategies, like determining how much SEO costs or how much PPC costs.
Bringing in a partner that helps you drive better results gives you an even stronger case.
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