The mindset that a marketing budget shouldn’t be subject to change or influenced by external conditions is one of the factors that can cause a business to stagnate. This is the story of how to responsibly grow your marketing budget on an ongoing basis without setting yourself back in other areas.
Even airtight brands and excellent products are always searching for perfect customers – the more the merrier, as the saying goes. Marketing departments try to dissect the process and their messages to reach the right audience in the right place and at the right time. These marketing efforts, which are critical for the success of a brand, directly eat away at a marketing budget, one of the aspects that directly and regularly affect the growth of a company.
In recent months here at Streetwise, we’ve also set out on a journey of discovery, focused on the experience of our customers and our content strategy. Along the way, we’ve realized that it’s time to implement a new kind of marketing budget. We’ve noticed that most of the businesses that reach out to us set a uniform budget, divide it up between various channels (usually one or two platforms) and begin every month from the same starting place, whether the results from the previous month were amazing or a complete failure. Is this the best way to approach this issue? We believe things could be done differently.
How to increase your budget – without spending more
One way to ensure the continuous growth of your budget is to integrate it into your business plan. We, for example, think of the budget in percentages: part of our income isn’t written down as profit, but as the marketing budget for next month. The percentage remains the same and the amount, assuming that you’re managing your marketing budget properly, should increase with time, together with your exposure and number of customers.
It’s important to note that even during slower months, you still need to set a base amount for your marketing budget because you’ll find yourself in hot water if you aren’t reaching new customers and finding new clients.
How to use your marketing budget to grow your business
A business has two ways of growing: bringing in new customers and increasing conversion, or expanding the participation and activity of existing customers. In the second case, it’s pretty simple. All you need is to create belief, create value beyond a basic product and create new services optimized to the real needs of your customers.
By the way, if you do that well, you’ll also gain new customers without having to advertise. Word of mouth is amazing and there are countless stories of companies that grew without investing a dime in their marketing budget. It was like this for years in our case as well, but we recently reached the conclusion that we want to and can reach out further, so we established new targets, products (like In-depth Branding) and audiences.
Here we can start talking about bringing in new customers from scratch: In order to reach new people, there’s no way to escape investing in a budget that should grow with time. But now the question is what to do with the growing budget? In other words, if $1,000 got you to one result, will $10,000 multiply that effect? Not necessarily. It’s important to remember that growth needs to be linear, in accordance with your capacity. It could cause damage otherwise. In many ways, it also depends on how you channel your budget in order to direct your growth to the right place.
The most common mistake of growing businesses
For many, having a marketing budget means taking a few thousand dollars and putting them all into Google and Facebook, but as we’ve already said, there are more than a few smart ways of using your marketing budget that you probably haven’t of. If you keep investing in exactly the same platforms, you’re missing out on a lot.
For example, if more potential customers are approaching you but you continue to use existing resources to handle them, which leads you to dedicate less attention to each lead or even worse, not to follow up on leads at all, you’re shooting yourself in the foot. Sometimes it’s better not to seek leads and even stop a campaign (which we wouldn’t normally advise) if you are unable to handle what it produces (here are a few tips on what to do with your leads). That’s why part of the budget needs to be dedicated to operating the system and improving the customer experience, especially if this is their first impression of you.
So what should you do with your new marketing budget?
After making sure that all your customers or new leads are being taken care of, you can and should funnel part of your budget into promoting specific products. Create activities and audiences, start measuring results and see what happens. If you manage to bring in more customers you can try increasing it further.
Another part of your budget can be invested directly in your customers. Put products on sale and give samples or free products that you think might lead to more sales. Keep in mind that there needs to be meaning behind these activities. Don’t just give out whatever is cheapest if it doesn’t provide any value to the customer or doesn’t have any potential to create further interactions.
In summary, it’s important to note that marketing is part of the ensemble of your business. The kind of process we’ve described here needs to be carried out with an organized business plan that allows you to handle to new amount of work you create. Stop and think for a moment before providing a mediocre service because after all, the most efficient marketing is simply providing the best product you possibly can.