![]() ![]() Without a solid marketing foundation, your day-to-day marketing activities will range anywhere from “not very effective” to “a waste of money.” In general, your marketing foundation includes: Thus, the marketing foundation costs are not typically included in your 5%. You will likely have to exceed your 5% marketing budget to update your website once every three to five years. Why? Your website is available for both showcasing and selling your marketing services 24/7. Years that require more spending will arise whenever you need to invest in the foundation for all of your day-to-day marketing activities.įor example, an up-to-date, performance-based website is key-perhaps the key-to a solid marketing foundation. There will be times when you have to spend more to get what you want and need, but those are special projects. In fact, it seems pretty reasonable.īut we should clarify that our 5% rule applies to most years, not all, and covers most of your marketing, but not all. Ĭompared with those findings and the findings of many similar studies, 5% doesn’t seem that large of a number. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin-after all expenses-is in the 10 percent to 12 percent range. You should spend 2–5% of your sales revenue on marketing. BUT, as a general rule based on the latest research, expert opinions and years of marketing experience, we say: To understand the recommendation, first, let’s define ‘marketing budget.’ Your marketing budget refers to all costs for marketing, advertising, public relations, promotions and anything else you might blanket under that very wide-cast net called ‘marketing’ on a day-to-day basis: for example, Google AdWords, social media, print ads, sponsorships, collateral and even tastings.Īs you’ll see below, the ideal budget depends on your current marketing foundations. As advisors for caterers and small business owners, we’re often asked how to create the right marketing budget.Īs marketers, we’re frequently asked exactly where to invest that budget.
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