How Much Should I Spend On Marketing?

When it comes to determining your marketing budget, it's important to consider several key factors. Marketing encompasses everything from branding and website development to communications and sales. Each element needs careful planning to ensure your marketing system runs smoothly and efficiently.

Branding: The Foundation of Your Business

Building a brand isn't just for large corporations; it's vital for businesses of all sizes. Your brand is your first impression, combining the visuals representing your products or services with the words you use to communicate them. This includes everything from logo design to sales copy. A strong brand conveys credibility, while an underfunded one can create doubt. As the saying goes, "How you do anything is how you do everything." Does your brand image reflect professionalism, or does it suggest you're low-budget and disorganized? Branding is all about perception.

Investing in Your Brand

Start with a professionally designed logo, a defined color palette, a selection of unique photos or carefully chosen stock images, and well-written sales copy. While it might be challenging to track the ROI of branding efforts, think of branding as an investment that enhances every other part of your marketing strategy. A poor brand can hurt everything, whereas a great brand can help everything. Expect to spend between $1,000 and $5,000 for initial startup branding, with additional funds for ongoing updates and further development.

Advertising: Promoting Your Business

Any effort that directly promotes your business to prospects can be considered advertising. This includes running paid ads on social media or search engines, posting on social media, email marketing campaigns, direct mail campaigns, billboards, radio spots, outside salespeople, or networking events. Your advertising budget should also account for the cost of creating the content used in ads and managing advertising campaigns.

Planning Your Advertising Spend

When planning your advertising spend, consider two budgets: one to maintain current revenues and another for robust growth. To sustain current revenue, allocate 5% to 10% of sales towards advertising. For rapid growth, this number might need to be higher, possibly 20% or more, depending on your industry and business type. Startups should commit to a fixed advertising spend, as their revenue may be too low to use a percentage-based approach. For many small businesses, $1,000 per month is a reasonable minimum for advertising.

Communications: The Backbone of Marketing

I call communications "marketing insurance." If you're spending on branding and advertising, ensure leads are managed properly. Streamline how prospects can connect with you, focusing on methods like telephone and chat for website communication. Personal correspondence with prospects is crucial in many industries.

Budgeting for Communication

Costs for proper communication can vary by industry. Spend what you need to ensure you don't lose leads due to unresponsiveness. Mismanaged communication systems can be fatal to a business, as money spent on ads doesn't convert into sales. Another crucial aspect is customer service; you don't want new customers asking for refunds due to poor service.

Converting Prospects to Customers

Sales fall under the marketing umbrella as the prospect hasn't yet purchased. A prospect saw your credible brand promoted in an ad, visited your website to learn more, and is now ready to buy!

Allocating Funds for Sales

Sales spend will vary between industries. The goal is to develop professional sales presentations or methods that clearly explain your offerings and encourage purchases. Tools like graphic design slideshows, videos, and other media can enhance sales results. Ensure your sales team is well-dressed, polite, knowledgeable, and equipped with the tools they need to succeed.

Calculating Customer Acquisition Cost

Summarize your marketing spend into one primary data point: customer acquisition cost (CAC). This is the total cost to acquire a new customer, including branding efforts, advertising spend, designer and marketing team salaries, and sales process costs. Add up these expenses and divide by the number of customers acquired in the same timeframe. Evaluating your CAC annually and working to lower it without diminishing your brand is good practice. Rather than cutting your marketing budget, refine your marketing effectiveness. Starving your business of crucial marketing components is never smart.

Conclusion

A well-thought-out marketing plan can make or break a company. It can help a business stuck in a revenue plateau soar to new heights. By focusing on branding, advertising, communications, and sales, and by carefully managing your budget, you can achieve sustainable growth and success for your business.

Partner with The Jared Dalton Agency

At The Jared Dalton Agency, we understand that a well-crafted marketing strategy is essential for your business's growth and success. Our full-service marketing agency is dedicated to helping you build a strong brand, create impactful advertising campaigns, and streamline your communications to drive sales and enhance customer relationships.

Whether you're a startup looking to establish a professional image or an established business aiming to scale new heights, our team of experts is here to provide tailored solutions that meet your unique needs. With a focus on ROI and effective marketing spend, we'll work with you to develop a comprehensive marketing plan that delivers results.

Ready to take your marketing to the next level? Contact us today and let's start building a brighter future for your business.

The Jared Dalton Agency

• Email: jared@thejareddaltonagency.com

• Phone: 615-212-9690

• Website: www.thejareddaltonagency.com