It can be challenging to know just how much you should spend on marketing. This is because marketing is a form of investment for which you need to be able to expect a certain amount of sales in return. At the very least, there should be a greater number of people than before who have are aware of their company. Regardless of how you calculate success, there should be discernible proof that your marketing strategy is working. Of course how well the advertising plan works depends on how much you spend. Thus, here are some tips to help you to structure your marketing budget:
New Companies Spend More
This is an easily grasped concept. If you are going to spread the word about your company, you are going to have make more effort. As people have no idea about your brand, you are going to have to start building an identity. This means that you are going to have to access more avenues to spread the message out further. You are going to have to expect to spend between 12 to 20 percent of your total revenue or expected future sales.
Established Businesses Spend Less
With an established company, you have already been able to garner some interest in your business. Thus, you have the advantage of being able to spend less on marketing. Unless you are trying to reach a new audience, you will limit your advertising to a new product or service launch. If you have been operating for more than five years, you should pay about 6 to 12 percent of revenue or predicted sales.
Do The Math
As mentioned above, marketing is an investment. Thus, you need to know how much you will be receiving due to your financing. One of the ways that you can do this is to research the many branches of marketing. Will putting up billboards Melbourne be the best course of action for you? Or will TV advertisements be a better route? Once you are able to answer these questions, you can see how much each platform will cost. You can work this into your budget.
Another way to determine how to finance your advertising is to decide on what you expect from the marketing. For instance, are you trying to sell a particular product or service to your target audience? If you are, then you should set up a budget based on the projected revenue for that year. Choose a particular percentage from what you will hope to make in the current year and spend it on marketing. If you are more concerned with reaching people, then you are going to have adjust your methods. For instance, it has been determined that your potential client will have to notice your company at least on seven separate occasions to purchase something. In this case, you are going to have to determine at least seven different ways of reaching your consumers.
Use this tips to determine just how much you should allocate for your advertising budget. Spend it wisely.