Marketing plans of the past involved a fair amount of guesswork. Before the days of online analytics and trend tracking, creating a budget and marketing plan for a business was all about trial and error. Some companies would take big leaps and either have them pay off or fall flat on their face.
Investing in a marketing budget is not only a good idea, it’s a necessity for any business these days. It’s hard to know which areas you should invest in, especially with an ever-growing range of marketing and advertising options available. Before you decide on which marketing steps to take, you’ll need to set a budget.
Evaluate Your Business
Before you begin to set a marketing budget, it’s important to understand what stage your business is currently operating in. Your company will rank somewhere on a range of start-up to well-established. If your business is just starting out, or going through a period of growth, you might be better suited to invest in other areas of the business, such as hiring more employees or looking for a larger space.
While longer-running and more established companies often have more money to put toward marketing, they might also want to consider potential updates, such as rebranding efforts or a website update.
Understand Your Sales Funnel
Every customer or client goes through a journey–from the moment they are made aware of a company, to the moment they decide to take the action of purchasing their products or services. This process is called a sales funnel. It takes a potential purchaser (or lead) and turns them into customers by funneling the most qualified prospects.
Make note of the journey that your customers take before making a purchase:
- How are your customers made aware of your goods and services?
- What is it that keeps their interest in your company?
- Is there anything they need to know before they buy?
- Are there any major factors that contributed to making a final decision?
A sales funnel helps you deliver the right message at the right moment, which is what marketing is all about. The best use of marketing is when the right message gets put in front of the right person at the right time.
Consider Your Operational Costs
Properly calculated operational costs are the sum of a business’s fixed costs plus its variable costs. It will tell you how much your business spends to produce goods and services for your customers, and how much is left over to set other budget items–such as a marketing budget. They are important metrics for any business to understand and evaluate.
Evaluating the success or potential improvements of a marketing plan can only be determined if you first set clear goals. Are you looking to gain revenue or awareness? Is there a set number you’d like to reach to make a revenue goal? If so, how many sales would need to be completed in order to reach that goal? Conduct some research to better understand typical sales conversion rates and how to set a realistic target in your share of the market.
Scope out the Competition
Speaking of your share of the market, understanding your competition is very important to a successful marketing plan. Take a deep look into the key players in your industry. What are they doing in terms of marketing and advertising? Which methods or tools do they utilize? Are there certain areas that you might be able to capitalize on or improve?
Once you have completed these steps, you are ready to set your marketing plan. A good marketing mix will utilize traditional media, POP displays, and digital marketing. Depending on your audience and their purchasing habits, you might choose to focus on one area over another. From there, you can decide how much to spend, the tools you will need, and have a better understanding of how your customers want to be marketed to.
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