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How much should you spend on marketing?

An e-guide to help small businesses with small budgets work out what they need to spend on marketing




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Marketing Angels – How much should I spend on marketing?

© Copyright 2010 Marketing Angels Pty Ltd

The right of Marketing Angels to be identified as author and copyright owner of this work is asserted by Marketing

Angels Pty Ltd in accordance with Australian copyright laws as determined by the Australian Copyright Council.

Copyright extends to any and all countries in which this publication is purchased and/or viewed and/or read.

All rights reserved. No part of this publication may be reproduced or transmitted, in any form by any means without

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About the AuthorMichelle is Chief Angel at Marketing Angels, Australia’s leading

Marketing Consultancy for Small to Medium business providing

outsourced Marketing Management and direction and education.

Michelle is an entrepreneur who has built Marketing Angels from

the ground up. Michelle and the team at Marketing Angels have

worked with hundreds of small to medium businesses in the past 8

years from almost every industry.

Marketing Angels are the preferred marketing experts engaged by the ANZ bank to deliver

marketing advice and education to the ANZ’s Small Business banking clients via a series of

workshops and their online community.

Marketing Angels is also working in partnership with the Australian Retailers Association,

delivering Marketing services to ARA members under the ARA Marketing Services brand.

Michelle is a contributing author in the book, The Secrets of Marketing Experts Exposed,

and writes a regular column in My Business Magazine, Retailer Magazine and Manufacturing

Magazine and is a guest blogger for Fast Thinking!

She is often invited to comment on the marketing challenges facing Australia’s business sector in

the national press and is a regular guest speaker at events.

Michelle is also a busy Mother to 3 children, and lives in Manly NSW. She loves reading, riding

her bike and the ocean.




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Contents

About the author 3

Introduction 5

What every business should invest in 6 - 7

What you can expect for what you spend 7 - 10

a. Less than $2,000

b. $2,000 - $5,000

c. $5,000 - $10,000

d. $10,000 - $20,000

e. $20,000 - $50,000

f. $50,000 - $100,000

What you should spend on new vs current customers? 11

Different investments for different business stages 11

Making sure you get it right 12




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IntroductionI’ve written this e-guide because the question “What should I spend on marketing?” is one

of the most common questions we are asked by small businesses. A question that is as hard to

answer as “how long is a piece of string”?

The problem is there’s no one size fits all answer. A lot of people ask whether they

should spend a percentage of turnover and 10% is often bandied about as a general rule

of thumb.

Looking at turnover is not very helpful either though as profit margins will be different for

every business and it’s the cash flow from that, that will determine what’s left over to spend

on marketing.

Ideally your marketing budget will be driven by your business goals.

- What do you want to achieve?

- How much revenue do you need to generate?

- What does that to equate to in sales?

- How many leads do you need to generate a certain number of sales of a certain value?

Answering these questions should help you to determine what you need to invest to generate

those leads and sales.

Regardless of your goals - what is true is that every business needs to invest in marketing

on some level. Money is one component, but a large part of effective marketing is not just

throwing money at advertising, but investing in skills and resources to make sure you’re doing the

right activity and resourcing it so you’re being consistent.

If you are not willing to set aside any budget for marketing, then you have to ask yourself if you

really believe in the business you’ve decided to create?

All businesses need to invest something in marketing to grow. I hope you find this e-guide helpful.




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What every business should invest in

Learning about marketing, putting together a marketing plan and getting your core message right

$500 - $2,500- Read as much as you can about marketing. Invest in some e-guides or books on specific

marketing principals and tactics.

- Attend a DIY Workshop or a one on one ½ day workshop and/or get some marketing

coaching to develop your marketing plan, core messages and get the support you need to

put the plan in place

This will make sure that you don’t waste money on poor marketing messages and tactics. If your

marketing messages aren’t compelling or you are not promoting your business in the right places,

it’s going to cost you more overall to reach them.

Often a lot of the tactics a marketing consultant will recommend will be low cost or even free.

They’ll provide guidance on marketing tactics and messages that are going to be the most

effective (from a results and cost perspective).

Creating a strong first impression online and offline

$2000 - $10,000- Get help developing a good creative brief

- Get a decent corporate identity developed

- Get a decent web site developed that is optimised for search

First impressions are really important when you are starting out and don’t have a well-known

brand. Poorly designed logos and web sites can actively work against your business when it

comes to attracting new customers.

These days it’s also critical that you can be found online when people are searching for your

product or service.

http://www.marketingangels.com.au/Cases/DIY-Group-Marketing-Workshops.aspx

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http://www.marketingangels.com.au/Products/marketingcoaching.aspx

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A Survey conducted by Enquiro Search Solutions Inc reveals:

- 93.4% of respondents use the internet to research a B to B purchase decision

- 63.9% of respondents go to the search engine as the first step in the buying process

- 54.6% of the people are 1-3 months away from making a buying decision

- 89.7% of the people are 2 weeks to 6 months away from making a buying decision

- 36.8% researched and bought online

- 27.3% researched online and bought offline

- Only 7.9% didn’t find what they were looking for

- 76.7% of Google users used the natural search links

- The top 3 organic listings accounted for 59.6% of the click-through

So, getting some help working out who you are targeting with your branding, and the messages

you need to send people with your communications will help you create a first impression that

leads to opportunity.

Tip: Investing in marketing is essential in the good times and bad. Building a strong brand when times are good will help you when times are tough!




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What you can expect for what you spend?

Less than $2,000Maybe you need to rethink whether you believe in your business?

It’s very difficult to get anything for less than $2,000. If you are not willing to invest at least this amount you need to question how much faith you have in your business and your commitment to grow.

$2,000You’ll need some design and technical skills yourself.

$2,000 might get you:

- Some business cards with a cookie cutter logo and a landing page or blog site created

using a free open source web platform.

- If you have the right web site you could then build a list and send email campaigns using

some of the free/very low cost email marketing platforms.

- DIY search engine optimisation – you would need to really know your stuff to be able to

optimise your site well enough by yourself to get consistent leads through search engines.

A really internet savvy start-up could generate some awareness with less than $2,000 – but you would need a lot of marketing smarts and online skills to do so.

$2,000 - $5,000 will get youThe bare basics:

- A cheap corporate identity

- A simple brochure-style website

- Search engine optimisation managed by yourself

For this amount of budget you would need a decent amount of skill (particularly in search) and a fair amount of time to manage the marketing yourself.




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$5,000 - $10,000 Some smart marketing tools:

- Perhaps a more complex website (one with perhaps a good content management system

and customer relationship management system)

- Search engine optimisation and limited search engine marketing managed yourself

- Some consulting help to assist with product development, low cost marketing ideas and

PR and marketing coaching

A small budget should be focussed on investing in some good web-based online marketing tools and some expert help on low- cost marketing.

$10,000 – $20,000Some smart marketing tools and a very limited amount of advertising, direct

marketing or other marketing activity:

- A high performing web site with some customer relationship management tools, a content

management system and perhaps an email marketing platform

- Limited search engine marketing (campaign created & managed yourself)

- Limited paid search engine optimisation assistance

- Very limited direct mail activity, limited print advertising or event budget

- Very limited PR

A budget of this size will mean you can now start to expand on your marketing tactics. You’ll have a small amount of money to invest in some paid advertising or other tactics that require an investment. You probably won’t have enough to advertise or run other campaigns frequently though.




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$20,000 - $50,000Some smart marketing tools and some consistent advertising or other marketing

activity in one medium:



- Search engine marketing (managed externally)

- Paid search engine optimisation assistance

Consistent activity in either:

- Direct Mail

- Print advertising

- Some events

- Limited PR

With a budget of this size you should now be able to start to consistently advertise or run a marketing campaign in one medium.

$50,000 - $100,000Some smart marketing tools and consistent advertising/marketing activity in

multiple mediums:



- Search engine marketing (managed externally)

- Paid search engine optimisation assistance

Consistent activity in one or more of the following mediums:

- Direct Mail

- Print advertising

- Some events

- PR

- Some sponsorship

With a budget of this size you should be able to start to consistently advertise or run marketing campaigns in more than one medium.




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What should you spend on new vs current customers?International Direct Marketing expert Alan Rosenspan recommends that 50% or more of your

marketing budget should be spent on your current customers.

This should be split between:

- Upselling customers products or services of greater value

- Cross-selling customers additional products or services

- Growing your customers through your current customer base

(via referral, loyalty and word of mouth programmes)

So make sure when you are working out your overall budget you are thinking about your current

customers too.

How much should you spend for different stages or types of businessesAt different stages of your business’ life you will need to spend more or alternatively you may be

able to spend less per customer on marketing. In general the following rules apply:

- New businesses will need to spend more to make prospects aware of them as they can’t

rely on word of mouth

- More established businesses with some brand awareness can spend less per customer as

a lot of new customers will be generated via word of mouth

- In more competitive industries you will need to spend more per customer to stand out

amongst competitors




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Making sure you get it rightSo now you have a guide for how much you might need to invest in marketing. Regardless of

what you decide you can afford, as a small business owner one thing is certain.

You need to make sure that you get it right, because you can’t afford to waste precious dollars on getting it wrong.

This is where working with an experienced marketing consultant or investing in some marketing

knowledge (through guides, books and seminars) can really help you get good return on your

marketing investment.

Whatever your budget Marketing Angels can help you get smarter marketing through:

- DIY group marketing workshops

- One on one ½ day marketing planning workshops

- Marketing coaching and mentoring

We hope you’ve found this e-guide useful. Feel free to pass it on! We’d also love to hear of any

topics you’d like more information on for future e-guides.

If you are not sure what marketing help you need feel free to contact us - we love helping small

businesses get smarter marketing!

You can get more information and tips from Marketing Angels by:

- Subscribing to brand news

- Reading our marketing matters blog

- Follow us on twitter

- Becoming a facebook fan

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how much should you spend on marketing? - dynamic …€¦ · get smarter marketing sydney ... 1300...

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