A business’ success can be measured by how it has been performing in engaging existing customers and attracting new prospective customers effectively. This requires a good marketing strategy and for the strategies to keep recording high ROI, the marketing wheels must keep spinning with a mindfully devised marketing budget in place.
As most businesses have onboarded themselves online and customers and prospective leads are spending most of their day on the web, digital marketing is setting unprecedented records as the foremost way of reaching the customer. To gauge the effectiveness of your digital marketing efforts you need a substantial digital marketing budget to rely on.
According to experts in the marketing sector, a business should earmark 7-10% of its revenue for all marketing spending. Reportedly, in the modern day, businesses are allocating 9.5% of their revenue to their marketing strategies of which a staggering 56% contributes to digital marketing efforts alone.
With so much potential to attract customers and build communities of like-minded people for your brand in the digital sphere, you must consider these points while chalking out your digital marketing budget:
Your sales cycle must be in place
The foremost step in making your digital marketing budget is to present the sales cycle with various stages of where a lead is present while buying your product. The Awareness, Interest, Decision, Action, or AIDA model of the sales cycle is frequently used by most digital marketers to understand where a prospective customer in the sales funnel is and what kind of content will prompt them to move from being a lead to an invaluable customer.
Understanding the buyer journey will aid you to understand which of the marketing activities, be it social media ads or video marketing, pay-per-click or email marketing, etc., will work in your favour to convert the lead into a customer.
Define your goal and objectives
Your capital is a precious resource and you need to know what you are trying to achieve through your business solutions. For that, you must know why you are in the industry and driving that business in the first place.
If your business is about aiding men’s grooming range with specific products, your answer to why is, seeing the gap in the supply of men’s grooming products and the increasing demand from male audiences for quality skincare products, your business strives to increase the supply of the products by manufacturing and distributing the same.
What you achieve from the same could be – being the foremost brand catering to men’s skincare needs with organic products.
Having defined these two important aspects, the question that arises next is how will you achieve it? In deciding this, you must think and brainstorm on how you wish to reach the audience in terms of the tone of the message, the medium of the content, and measuring the performance of the campaign, etc.
This approach will help you steer clear of unnecessary expenses, like, you may not reach the general audience pages with your ads on e-marketplaces, hence saving on the cost. Moreover, you will reach out to the audience where they spend their most time on, be it Instagram or any specific men’s blogging website that most men frequent for invaluable tips on grooming.
Classify your costs
Marketing budget allocation is not the only expense for your business. You need to engage your finances for other functions of your businesses too.
Measuring the needs of financial input from the other functions will help you understand how much money can you keep aside for your branding and marketing efforts.
You must also understand how much each strategy of marketing is costing you and how has the strategy been working in your favour. Creating a marketing strategy is one thing, but ensuring its continuous functioning requires subject matter experts and resources like SEO specialists, etc., to drive the marketing vehicle for your online business efficiently.
Salaries, campaign costs, miscellaneous costs, and much more, become a part of the cost for your firm and you must measure them all.
Know your past performance
Nothing’s better than looking back at your past performing marketing campaigns and assessing them to be repurposed into a new one. If a campaign was successful in attracting the right audience, exceeded in generating legible leads than expected, was well-timed, and had the right message, you can surely pull them up and repurpose them to your benefit by knowing the right amount of spend that will go and what are the results that you can expect.
If you believe that a formerly disseminated campaign that didn’t perform well in the past still has the potential to work in your favour this time, then you must focus on which things led to its failure and how can you grapple with the costs by limiting certain things in the same. Also, if you see that a type of campaign has been not working correctly for your business no matter how many attempts, you must drop it.
If something is not generating ROI for you, you need to revisit them and assess the reason behind the strategy’s laggard performance.
Evaluate which marketing tools you need
The market is flooded with different marketing tools. As each business is different and the industry that it is working in, their needs can be equally different. You don’t want to engage your capital by amassing many marketing tools out of which some or many might not even be relevant in your use case.
You need to carefully assess which ones have been working in your favour and how. Engage your money there to maximize ROI.
After picking on the tools, chalk out the strategies and then make a layout of how much each strategy will cost you. Basis this, your budget will be allocated mindfully without leading your business to bleed.
Keep funds for experimenting
Not all strategies that are proven to be working in your favour guarantee you success in the next iteration of its application. The consumer is constantly evolving and so must you too.
They are bombarded by content and strategies from your competitors too which makes them choose between you and them. You must know what your competitors are applying as strategies and deep dive in trying to experiment on those lines.
You can consider the aforementioned pointers to set a robust digital marketing budget to ensure an optimal marketing practice without bleeding costs, but it requires continuous commitment and tracking for which you will have to set up and grow the marketing department in your firm.
While it can be a costly and time-consuming affair to hire the right talent and ensure optimal functionality, you can engage in outsourcing your marketing requirements to a seasoned digital marketing agency to help you with fool-proof solutions at cost-effective prices.
Edited by Affirunisa Kankudti
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)