Is your business spending enough on marketing?
According to our surveys, if you’re like many of your colleagues, the answer is no. Go-to-Market Strategies recently released the results of a survey showing that 42% of marketing budgets fall below the 5% of revenue mark. In fact, only 36% of companies felt they spent enough to be successful by their own standards.
Determining the correct amount to spend on marketing is an often perplexing task for small to medium-sized companies. The correct way to start is by formulating a marketing plan – ideally for a one-year timeframe. With a marketing plan that outlines your firm’s goals and and a simple budget spreadsheet you’ll be able to track and measure effectiveness of each campaign. You’ll also be able to quickly visualize if you are putting your eggs in just a few baskets instead of taking advantage of integrated marketing. For example, if you are spending 90% of your budget on advertising and none on public relations, you are missing the great “bang for the buck” of PR.
We advise clients to put together the platinum plan based on about 15% of revenue. That way certain campaigns or tactics are not left off the plan upfront due to “budgetary reasons”. Then prioritize campaigns and only execute the ones within a comfortable budget for you. Ideally your company should be spending 5-8% of PROJECTED revenue, not last years’ numbers.
Wikipedia has a great page on Marketing Plans and Budgeting if you are looking for a free source of information.
