Inevitably, all businesses – whatever their size – face the question, “How much should I be paying for marketing?” or “How much of our budget should we devote to marketing?”
It’s a difficult question to answer with definitive figures. Yes, there’s are some rough rules of thumb you might want to observe. For example, it’s often recommended that companies should spend around five percent of their total revenue on marketing to maintain their current position. If you’re looking to grow your business or grab a bigger market share then you may want to push your marketing budget up to 10% of your revenue.
These figures are based on businesses with six-figure revenues. If your profit margins are smaller, your marketing budget may have to be smaller too.
A recent report by Web Strategies showed that business-to-customer marketing spend has dropped over the past few years with companies devoting an average of 9.3% of their revenue to their marketing.
This report also showed that the average firm in 2016 allocates 30% of its overall marketing budget to online – a rate that expected to grow to 35% by 2019. Search engine marketing (SEO & SEM) captures the largest share of this online spend, and social media investments sit at around 15% of the online share.
There are other factors that will influence how much you pay for your marketing. We’ve put together some thoughts below to help you work out how much you may have available to spend:
What do you want your marketing to achieve?
Before you consider outsourcing your marketing, it’s important to understand what you want your marketing to achieve.
- Do you need help launching your brand?
- Do you want to attract new customers?
- Do you want to differentiate your business from your competitors?
- Do you want to position new products or services within the marketplace?
Once you understand your objectives, you will have a much clearer idea of what your marketing brief is as well as how marketing support could help you reach your goals. You can then look for a company that has the right expertise.
What services and support will the marketing company deliver?
Different marketing agencies will have different areas of expertise.
- How well does the agency know your sector?
- What results have they achieved for other clients?
- How experienced are they with marketing that fits your objectives? For example, if you’re launching a start-up clinic, do they have experience of creating a new brand and positioning it in the marketplace?
Try to get a clear breakdown of what services and support a marketing company will give you as part of the agreed fee. Confirm what services would only be available if paid for as extras.
The return on your investment (ROI)
There is absolutely no point spending your marketing budget in a way that won’t give you a clear return on your investment.
Again, this is a tricky area. Some marketing tactics need a long-term approach to see an effective ROI, while others will be fairly instant. Also, marketing activities should complement one another and come together to create a snowball effect of brand awareness, which can make it harder to pinpoint the ROI of a single activity.
At Cosmetic Digital, we think it’s essential to keep an eye on the metrics behind your marketing activities. How do changes to your SEO affect your website traffic? Which blog articles attract more hits? What is the clickthrough rate of your latest Google AdWords campaign? By reviewing measurable data, you can keep an eye on what’s working, what needs tweaking, and what may be wasting your budget, and adjust your spend accordingly.
Pay peanuts and you’ll get monkeys
How does the saying go? “You think hiring a professional is expensive…try working with an amateur”. It’s an important consideration, especially because you want your marketing budget to achieve as much as possible. Although you will be confined to your marketing budget, we would always urge you to choose marketing support carefully, even if it means pushing to the top end of what you can afford.
You should expect to pay professional rates for a professional marketing agency. After all, they will have years of experience, industry contacts and knowledge to underpin your marketing activities and give you the best ROI. Look for agencies that have a good reputation in your field – people come to Cosmetic Digital, for example, because we know the dental and aesthetic industry inside and out.
If your budget is tight, it can be tempting to dabble in some DIY marketing. This can be a lot more costly in the long-term. Without guidance, how can you be sure that you’re spending your marketing budget wisely? How effective is your copy at creating conversions? How much do you really know about SEO?
Many businesses that take the DIY marketing route simply don’t see the ROI that they need to grow or even maintain their business. DIY marketing can also take you away from your actual bread and butter business, reducing the amount of time you spend with clients. Unless you have a dedicated marketing team in-house, this can lead to a haphazard approach with you simply fitting in scattergun marketing as and when you have time.
Making the most of your budget
A good marketing company will understand that every business has a specific budget. The key is to find a marketing agency that will help you get the most bang for your buck – in other words, who’ll understand where to spend your budget to get the best ROI or to meet your marketing objectives.
Here at Cosmetic Digital, we understand where start-up clinics should spend their marketing budgets and what they can afford to ignore. We also have proven and cost effective strategies for growing practices or multi-site businesses. We find this kind of bespoke approach means that, regardless of how big or small your budget is, we can make it work for you.
If you would like to some advice about your marketing budget or what marketing would work best for your business, give us a call at Cosmetic Digital on 0115 9140 640.