Effectively Budgeting for Small Business Marketing

Marketing is a critical part of the success or failure of any business in today’s economy, especially small business. There are more ways to promote a business or product today than ever before.

 It’s easy to get caught up in trying to decide how to integrate social media, promotional products, signage, web ads, print and electronic media and other tools to get your message out.

To succeed, it’s critical to integrate all your marketing efforts into a comprehensive strategy. When you do that, it’s easy to allocate specific amounts to specific marketing approaches, target the exact audience you want to reach, and measure the return on your marketing investment.

When you know how well each aspect of your marketing program is performing, you can make adjustments that will increase effectiveness and won’t waste valuable marketing dollars.

Where to Start: Define What You Want to Achieve

Too many small businesses don’t take the time to make a plan. They often throw money at marketing efforts of all kinds, based on a hunch, or possibly a persuasive media sales rep.

Instead, start by defining what your goals are for your marketing program. Do you want to increase brand awareness, keep your existing customers, attract new customers, increase sales? Know where you want to go before you start.

The Next Step: Know Your Customer

Who’s your target audience for your marketing program? Do you want to reach men? Women? College students? Retirees? Which marketing channels do they use, and how often? The answers will help determine how to allocate your marketing budget.

Marketing Strategies – Pros and Cons

One of the most important reasons to mix marketing strategies is because there’s no one-size-fits-all. Every approach has both positives and negatives, so a combination is more likely to be successful. Let’s look at a few.

Digital Marketing: This term encompasses online marketing of all sorts: email, social media, content marketing and search engine optimization. 

On the positive side, it enables any business to function 24/7 and to reach a global audience of potential customers. It can be more cost-effective than other approaches, and provides easily measurable results through analytics.

On the other hand, to be done right, digital marketing requires having (and/or buying) specific technical knowledge. It can require a significant investment of time, and presents potential privacy and security risks.

Local Marketing

Local marketing includes sponsoring local events, local market SEO, local press, flyers, and signage. A business can build strong relationships with customers in the target market, increasing customer loyalty. It’s possible to target specific demographic groups, and greatly increase local visibility

However, it can be expensive and time-consuming, offers only a limited geographic reach and the business can have less control over the message once it’s out in public.

Promotional Products or In-Store Promotion

Promotional products and in-store promotions can be a powerful way to increase brand awareness and encourage customer loyalty. They give customers a connection to the brand.

Such products and promotions can be expensive to produce and distribute, however. Their effect can be only short-term. Their effectiveness can be hard to measure, and can possibly devalue the brand products if overused.

Public Relations, when handled well, can positively improved a company’s credibility. It can be highly cost-effective, especially when achieving free media exposure. It can improve good relations with the community, and is crucial in crisis management. 

The potential downsides of public relations can be steep. It can be expensive if employing an outside agency. It takes time to build relationships with media outlets, and the results can be unpredictable. The business cannot directly control the message, and it can be misconstrued if not presented carefully.

What About Traditional Print and Broadcast Media?

Despite all the buzz about digital media and alternative marketing methods, there’s still a place for legacy print and broadcast media. They’re an excellent way to build local brand awareness, and are a good way to reach a demographic that relies more on such media than online sources.

Broadcast media in particular can be expensive, and the print audience is in decline. For that reason, they’re best integrated strategically into the total mix.

Allocating the Marketing Budget

It’s important to keep in mind that the needs of each business will vary to a greater or lesser degree. The following are some general guidelines for initial consideration.

SEO 

Digital marketing reaches a wide audience and can be highly cost-effective. Start by allocating 40 to 50% of the budget to it.

Local Marketing

Devote 20 to 30% of the budget to local marketing. It’s a reliable way to build a local presence and get your brand known.

Promotional Products and In-Store Promos

Consider allocating 10 to 20% of your marketing budget to these items. If you’re starting out and want to build a presence, go toward the higher percentage. If, after measuring ROI, you can adjust the percentage as your business grows.

Public Relations

P.R. can help establish a new business reputation. Consider devoting 5 to 10% of your funds toward it.

The Importance of Measuring

Measuring the results of your marketing efforts is a must. As you analyze the results of each approach, make adjustments to ensure that your marketing efforts are achieving the greatest possible effect..

Flexibility is Key

As you implement your marketing plan, you’ll discover what works and what doesn’t.  Each component has a role to play, and those roles can shift over time. Don’t be afraid to redistribute funds as needed. Success comes to those who plan.