“How much should I spend on marketing?” That’s one of the most maddening questions that keeps popping up in every marketer’s mind. Unfortunately, there is no simple answer to it. Let’s talk about money for a while here. Some people consider marketing as a cost, others call it “investment.” Those who consider it an investment are likely to be strategic in the application, but how do you determine what marketing level needs to be achieved, regardless of the terminology used? According to the general rule of thumb, companies need to spend about 5% of their total revenue on marketing to maintain their current position. Companies that want to grow or gain more market share need to increase their budget percentage (typically around 10%).
An important factor in marketing a new company is to test your marketing tools, to see which ones provide the best return on investment. As for established companies or most long-running companies can look at the data and understand which tools serve them. If not, it is a troublesome situation.
What do experts say?
Marketing professionals and agencies usually recommend that 7-8% of a small business’s total revenue be used for marketing. Studies show that SMEs (Small-to-Medium Enterprises) spend about 3-5% according to this rule.
When a marketing agent calls you or sends you an e-mail to sell a service, but it always feels like they are adding you an unnecessary fee. But the truth is that that’s how marketing works and without digital marketing, you will lag behind the competition. We think that marketing is like paying electricity bills. If you refuse to pay your electricity bill, your business would be in a dark place, right? So is digital marketing.
What’s the lowest marketing budget?
Well, how much marketing is going to cost you?
Let’s talk about the minimums. What is the minimum amount that your business should spend on marketing? We recommend spending at least $500 a month on your marketing plan. Can you? If you spend $500 a month, you should focus on building your online presence known in the growing market or improving your local search rankings. Also considering advertising budget, marketing and reputation management, inventory management, and asset management.
Despite being a solid local search marketing foundation, we must spend some of the amounts on digital marketing too, because consumers want to interact with companies through integrated marketing, and $500 per month is not enough to create an integrated marketing strategy for local businesses.
Imagine if you can add $500 to online advertising. While local marketing can help build a better presence and attract local customers, an online advertising strategy is required to explore new markets.
How to determine the budget of marketing?
There are no hard and fast rules to determine the marketing budget. Every business is different. Marketing ultimately depends on how fast and how wide you want to grow your business. No matter what’s your business size, no fixed marketing budget is required. The important thing is planning business growth, and using metrics to determine marketing efficiency can help you understand how much you spend and where you spend it.
Those who stop marketing to save money are like those who stop a clock to save time.