I’ve seen all kinds of estimates on how much a marketing budget should be. Usually, the estimate is just enough to cover the products or services the person doing the estimate wants to sell.
An industry standard that’s been around for a long time is 5% of revenue. The idea behind making your marketing budget a percentage of your revenue is that marketing costs are funds you are reinvesting into the company, and should be tied to how well the company is doing. In the real world, I’ve seen companies spend far less and far more than 5% and get results that met their definition of success. What matters most is that you spend the budget you do have wisely.
A zero budget won’t keep you in business long, and it certainly won’t help you grow. If you truly have no cash, you’ll need to roll up your sleeves and put sweat equity to work. If this describes your situation, how many hours can you put into doing marketing? Write it down, and put a dollar estimate of your hourly rate next to it. That’s what you’re really spending.
If you’re already spending money and you’re comfortable with that level of investment, make sure that you’ve prioritized your budget in line with your prioritized goals. Put the biggest chunk of money where you’ll get the best return or achieve the biggest goal. (This becomes a great way to say “no” without guilt to one of those “fabulous” marketing opportunities a salesman presents to you.)
If you’re willing to invest more to achieve your goals faster, or because you know that growth requires more resources, then determine a dollar amount you can spend and divide it among your prioritized goals. Budgeting money doesn’t obligate you to spend it, but it does give you a tool to prioritize new opportunities and it may free you to investigate options you might not have considered before you knew what was available to spend.
Remember that your marketing efforts must be accounted for in your budget either in dollars or in time spent. As you budget your time to complete other projects, be sure to allow for your marketing investment.
Setting a budget also creates one way to measure effectiveness. Over time, you’ll want to ask yourself whether a particular marketing method is earning its keep. Knowing what you’ve budgeted for it compared to the value of how it contributes to achieving your goal comes in handy when you need to decide what to keep and what to change.
The “Irresistible Difference”
Before we leave the nitty-gritty if your business plan, there’s one item left we need to talk about, your “Irresistible Difference.”
What I call your Transformational Value is how you address your prospect’s Problem/Pain/Fear and overcome his Ego/Money objection. Your Irresistible Difference is what draws a prospect to you and your company as opposed to your competitors.
Your Irresistible Difference should tap directly into who your best prospect/customer is. It should fit that customer like their favorite pair of jeans, not only covering what’s necessary, but making them feel wonderful as well.
Think about your best customer’s qualities. What can you provide in your service, package or delivery that will meet their need as well as their unspoken desire? For some customers, convenience is king. For others, it’s value, or reliability, or exceptional knowledge. Not only will you gain some good insights into powerful marketing copy by looking for the Irresistible Difference, but you’ll also get some great ideas for where to find your best prospects and how to reach them.
For example, customers who prize value may join online communities dedicated to saving money. Those could be great places for you to participate through chat, forum posts and blogs because your audience is already there. A brand-conscious customer may place more than the usual value in being a member of professional and alumni associations and participating at a higher-than-average level. You might find those groups particularly useful to your marketing strategy because they tap into qualities the prospect prizes.
Your Irresistible Difference demonstrates how well you understand the quality the prospect values through where you market (including your choice of social media sites and the type of content you share), how you structure your product/service, how you deliver your product, and how you position your company in the marketplace.
As you become aware of the Irresistible Difference you offer to your different target audiences, make a note of it so you won’t forget to put its power to work for you.