Updated January 2021 (note: this information has been updated to include adjustments resulting from the COVID-19 pandemic).
Goodbye 2020 is a common sentiment resonating across business industries as it pertains to the impact of the pandemic.
Thinking back to March 2020, we were all taken by a storm with an immediate lockdown, and for many businesses, this sudden change caused immediate reductions to marketing budgets almost instantaneously. The knee-jerk decision to panic was not the best decision at all since this option can leave any business worse off as the world returns to normal.
Instead, the better solution was to reallocate resources by shifting spending of one marketing activity and replacing it with a different more feasible, marketing option. IE: One quick example that many businesses adopted was the transition from traditional events to virtual events and not merely canceling the remainder of 2020 events.
Having a marketing budget in place is one of the best ways to support business growth.This is not only because you are allocating resources to grow your business this allocation also brings a sense of vision, focus and planning.
Not having a formal marketing budget in place is a huge missed opportunity and potentially a guaranteed pitfall for any business.
Top 5 Benefits OF Having A Marketing Budget
- A clear path to execute marketing touchpoints across multiple channels.
- Create marketing messages that help your brand stand out from your competitors.
- Adequately target/ideal clients/customers, where they are.
- Build brand awareness by sharing valuable industry information/resources.
- Develop effective storytelling geared to inspire, educate, and promote products/services to a particular target for business growth.
Having a marketing budget has always been a smart business decision, and now is a very critical time.
Proper planning is the best path to business success.
A marketing budget is a guide to ensure that your business stays on track with estimated costs vs. actual costs year over year that includes all marketing expenses.
One major benefit of having a marketing budget is the ability to measure ROI (return on investment). You can quickly compare year or year sales to your overall marketing budget and determine what is working.
A standard marketing budget line item for many businesses includes some form of a brand reboot. Brand changes can be visual, a product offering change, or a target audience change. Note: Brand changes should have supportive reasoning and be aligned to data, research, or a business objective.
The scale for branding may vary and generally includes: website improvements, maintenance or redesign (ongoing maintenance, ADA compliance), logo development or redesign, branded promotional products (giveaways), printed brochures/materials.
- Plan to win. Business planning can elevate success, so it’s important to place an adequate amount of time planning to position your business for the best results.
- All marketing activities should be included: consider how will you get the word out about your new or improved service/product. Include every step and the associated cost.
An efficient way to do this is to pull details from your marketing plan, assuming you have one and set an allocated timeline for each component of your marketing activity by day, week, and month. This will be you a step-by-step strategy with the associated cost.
Another way to approach this process is to consider the source of all 2020 and 2019 business and cross-reference those actions into a comparison chart that highlights success stories and eliminates failures from future marketing activity.
Track and Replicate Marketing Successes
By establishing a successful revenue chart, derived from 2019 and 2020 marketing efforts, you are further creating a positive path or growth.
You likely have heard the phrase “You have to spend money to make money.” This is a true statement with marketing. However, since there are so many different marketing platforms available to promote products and services, using caution is imperative. The goal is to focus on proper planning, targeting, testing, and measuring.
What To Include In Your 2021 Marketing Budget
Need a sample marketing budget? Request it here.
Your final marketing budget will include a combination of estimated and actual costs. The estimated cost column will be your starting number and the actual cost column will be completed after the final cost has been incurred (completely executed/invoice paid in full). Note: This number may fluctuate slightly up or down.
2021 Marketing Tools
Marketing automation, artificial intelligence are two of the biggest advantages that technology brings, in many cases driving a 14% increase in sales productivity. So when possible, automation should be considered for the below services when possible.
- Building a network of Partnerships/Referral programs with other businesses
- Membership Program
- Loyalty Program
- Quarterly Direct Mail
- Focus on Testimonials: Ask your customers for recommendations
- Website development & management – ADA Compliance
- Email marketing
- Social media marketing
- Customer Relationship Management, (CRM)
- Content Marketing – Blog writing
- Search engine optimization
- Video marketing
How Much To Spend On Marketing?
The amount of money a business should budget for marketing varies greatly by industry, competition, business size, and years in business. The US Small Business Administration recommends a marketing budget to be between 2% and 10% of sales. Some companies spend up to 20% of net sales depending on product launches, competition, etc. The overall average is between 4% and 6%.
Want to position your company for growth? Outsource your marketing to a seasoned team that focuses on delivering flexible marketing solutions and consistent branding. Contact us today, Marketing 4 Real Results.