With the current economic climate, it’s difficult for companies to allocate enough money for their marketing budget. The mindset of most business owners today is to reduce costs by cutting marketing. Why?? Marketing should be the last to go…… it’s the only way a business can continue communicating with potential customers and impact sales. Without marketing…companies are keeping their sales stagnant. Why is thisconcept so hard for CEO’s to understand? The old philosophy that you have to spend money to make money should be applied…however businesses today are consumed with cutting their marketing budgets.
The big question of the day is how to do more with less? When it comes to marketing budgets….it’s important to understand what works for your company. The first step is to go back and analyze previous marketing campaigns. Which marketing medium gave you the greatest return? Which marketing message worked…did not work? Once you determine this….then you are ready to build your budget and plan.
What should companies spend on Marketing?
Typically, the average amount that companies should spend on marketing should be between 1-10%…ideally 5% of annual sales. The majority of B2B organizations are focusing their marketing budgets on inbound marketing tactics, including social media, virtual events and webinars, and SEO . When considering outbound marketing tactics such as telemarketing, direct mail and print advertising, the majority of B2B organizations are decreasing budgets.So how do you continue building a marketing budget with limited funds?
Stay Focused On Your Company’s Goals & Objectives!
If your main objective is customer loyalty …..then build the budget around loyalty programs and customer campaigns. Don’t spread yourself too thin and not allocate enough dollars in the areas that are important to your survival. If your focus is lead generation/prospecting…..then your dollars should be allocated for direct mail and email campaigns. Reducing marketing spend in some areas is smart if you can justify why it makes sense for your company.
Low Budget Marketing Techniques That Can Work Wonders…..
Another way to work around small budgets is to come up with ways to promote your business without spending a fortune.
- Co-Marketing with a vendor or partner
- Becoming Newsworthy – Free Articles and Press
- Referral Programs – Customer Referrals are the best way to get new business
- Networking Events – Coordinate with other business owners (in other fields) and split the cost to hold an event. Perhaps host a networking event for your best customers and ask them to invite a guest.
Another big issue that can affect your marketing budget is resources. The decision to have an internal staff or outsource to an agency has a major impact on your marketing budget. The cost to pay salaries, health benefits, etc. can add up and take away from your campaign spend. Another alternative is to eliminate an internal team and utilize an advertising agency. Most agencies will try to work within your budget constraints and help keep your name out there. It’s your outsourced marketing team without paying salaries.
It’s time to finalize your marketing budgets….
The best time to prepare your marketing budget for the following year is October – December. If you have received a low marketing budget to work with…..than you will be forced to utilize the techniques above to try and keep your company moving forward. Hopefully, we will see a turnaround in 2012 and we can get back to business as usual! Until then….keep focusing your reduced budget on the right marketing for your business!
About Monique Merhige
Infusion Direct Marketing's founder Monique Merhige has over 15 years of marketing communications experience with technology companies ranging from small service firms and equipment manufacturers to a 1.5 Billion dollar division of Motorola. Monique is an Adjunct Professor of Marketing at Dowling College in Oakdale and Brookhaven. She holds a Bachelor Degree in Marketing and an MBA in General Management.