I wish I had some rule of thumb reply… “Well experts say that you should spend 10% of your gross revenue on marketing.”
But that’s just a myth.
I’ve known successful businesses who have spent 10% 25% and more on their marketing (especially to start up)..
I’ve known successful businesses who have spent next to nothing..
It really just depends..
I’ve also known businesses who’ve spent 10% or more on marketing and failed. As well as businesses who’ve spent nothing on marketing and failed.
Again, it really just depends.
What does it depend on?
Well; it depends on:
1. What type of business you are in: i.e., financial, retail, restaurant, etc.
2. Who your clients are: i.e., businesses or consumer
3. Where they are:
4. What marketing strategies work best to reach them.
5. What do they want?
6. Your personality. For example, if you’re not a person who enjoys the limelight, then publicity might not be a strategy that you use.
7. Your business and marketing goals.
My recommendation is to outline a marketing strategy that addresses all of those questions and put together a budget that you can live with. Give yourself a budget to start, whether it’s 3%, 5%, or 10%. Then test and measure to see what is working and what is not working in your marketing plan.
I can tell you, I have made lots of mistakes by spending too much money on marketing. But I’ve also made some great expenditures as well. Here’s some of the best and worst marketing expenditures I have made. (And note, these may not apply to your experience.)
Worst Marketing Expendures:
Ads in magazines, newspapers and newsletters. Too expensive, and I ran out of money before I could see any results. Plus, the ads had no sense of urgency or call to action. Note: If you’re in a highly regulated and highly competitive industry, ads may not be your best bet.
Sponsorships: Sponsoring a hole at a golf tournament, sponsoring a sports team to get my company name on the flyer. Now I’m not saying don’t do these, but just don’t go in expecting that your phone will ring as a result.
Best Marketing Expenditures:
Advertorials in magazines, newspapers, etc.
An advertorial is an article that you pay to get submitted into a publication. Articles rank high as credibility builders and they definitely work. Even better if you have a call to action at the end, and you can continue the placement over a period of time.
Closed-Network Networking Groups:
I’ve been a member of Christian Business Networking for many years and it has been one of my best investments by far. There are many groups just like it including BNI, LeTip, groups run by ASBA, as well as the local chambers. In addition, I started my own niche-focused networking group which was also very successful. Closed network means that there is one person per industry or category.
Because of my blog, used in conjunction with social media, and some search engine optimization, I have been asked to speak for many organizations. This has led to many new clients. It pays to have a professional looking blog and to keep it updated regularly.
My staff and team:
I have a team of 5 people that work with me. They are worth their weight in gold, in allowing me to leverage my time and my talents and to get more sales.
If you want to brand yourself as an expert, you need to have a book, period. And it’s easier than ever to get a book done these days. I do recommend you hire a professional editor and graphic designer to help you make a quality product. The investment will pay back exponentially. My book “How to Build Buzz for Your Biz” has only just been published, but it has gotten me interviews with the Wall Street Journal and Newsday.. (I will post the links here when the articles come out.) Email me if you want more information about how we could help you publish your book; firstname.lastname@example.org.
So that’s it. Put together your marketing plan, set a budget, and measure the results.
PS. I’d love to hear some of your best and worst marketing expenditures here in the comments.