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Making a Marketing Budget

The end of the year is looming, which means budgeting is on the brain. And no budget is more important to be conscientious of than your marketing budget.

If you’re like the rest of us, your number one marketing budget problem is this: You just don’t set a marketing budget.

Marketing is the consumer’s first exposure to your company, the initial impact that gets the clients clicking links, reading direct mail and eventually talking to your team of salespeople.

Budgeting allows you to control your money, instead of it controlling what you can and can’t do. Help your money flow to carefully arranged categories, nourishing your growth.

One thing is clear: you need a marketing budget.

Set Your Budget
The usual marketing process goes like this: A vendor calls the owner up and pitches a marketing tool to them, whether it be a new website, direct mail campaign, radio spot, etc. If the money happens to be there at the moment, the owner will then contract their service.

Sure, that vendor might provide a great marketing tool, but the owner doesn’t have a clearly defined budget to begin with, which causes problems down the line. If you don’t have a budget, you won’t be able to make good long-term decisions, effectively causing you to throw money away.

So exactly how much should one allocate for marketing?

The best model is to draw your marketing budget from a set percentage of sales revenue. The exact percentage of sales revenue will vary according to what stage of life your company finds itself in. 5 – 10 percent of sales is a reasonable range for marketing expenses.

Is it more important to amp up your marketing spending when you’re ahead and bring in sizable profits, or when you’re behind and profits are down? Putting money into marketing is actually most important when you are behind. This is because marketing brings in the new customers.

Companies which are either in their first years or launching new products and services should spend as much as they can spare on marketing, on the high end of the five to ten percent, and even beyond that range.

Be a Strategic Marketer
The marketer’s greatest weapon is getting into the heads of a target market. Don’t start with your product or service, but rather, start with the people you’re trying to reach.

What motivates your target demographic—how can you get your message to reach them? The answers to these questions will be specific to your service, and will determine the course of your marketing strategy.

The marketing options are plentiful, and potentially overwhelming, but you won’t be overwhelmed by the options if you first visualize your target market and pick the items that will appeal most to them.

For those working with tighter budgets, look into low cost methods first. Things like running an active Twitter and Facebook page can do wonders for your web presence. Other low-cost initiatives could include press offerings, joint venture marketing or endorsing high profile events and public outreach.

Just remember that low cost marketing isn’t truly low cost, remember that you’re paying in the form of employee work hours and time-investment. Weigh the real trade-offs, and don’t just skimp on services.

After you’ve allocated percentages of your overall budget to each category, let that determine the way you react to cold calls and pitches. Research and find a small set of vendors who cater well to your needs. In the ideal world, you’ll find one vendor who can satisfy all of your needs for a good price, which help greatly in keeps your company’s brand consistent and compact.

Test Your Budget
Here is the final, most important step. Look through your results to see where you reaped the rewards of your marketing budget.

Figure out where any revenue is coming from. Always ask new clients and new leads how they heard of you, and record what they say. With your digital marketing, use powerful resources like Google Analytics to track page views and landing page efficacy.

First budgeting attempts are always going to be uncomfortable, since it’s your first time experiencing having to create and act on a budget. Don’t worry—it’ll only become more natural.

By recording your results and the overall impact of your marketing budget, you will easily determine your future marketing needs, and hone your efforts by focusing your most successful tools. Don’t neglect your budget.


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Display Solutions Group provides customized brand enhancement through the design and turnkey product management of business identity items such as signs and graphics. Offerings include large format printing for commercial and corporate interiors and illuminated exterior signage. We serve Phoenix Metro and the surrounding cities like Chandler, Tempe, Mesa, Scottsdale & Glendale and we also serve Tucson. For additional information, contact Tim McCloskey at 480 286 2320 or tmccloskey@displaysolutionsgroup.biz