It’s that time of year ago when plans are afoot for next year. Clients of all sizes are looking at their business objectives for next year and therefore are also putting together their marketing plans to achieve those. Budgets are being set – and that includes that dreaded marketing budget.
How on earth do you decide on the perfect marketing budget?
At Merrie Marketing Towers we are currently very busy writing an awful lot of marketing plans for a number of our clients, and we have lots of fun writing them. Sometimes coming up with outrageous ideas, sometimes more sensible. Some highly creative, some more conservative. It all depends on what we are aiming to deliver, and what the marketing budget is. And as you can imagine, we get asked alot for advice on how to set the perfect marketing budget.
Eons ago (here, here, here and here!) I wrote about the various methods you can use to set a marketing budget, but my quick rule of thumb advice is to start with 1 – 2% of your turnover figure and go from there. If 2% feels too much given your profitability, then look at 1%. If your profitablity is quite healthy, then go for 2%.
The more a company spends on its marketing, generally the better results it will get. More marketing budget means more creative work, with more professionally written copy, across more media, with more frequency. More budget also means you can extend your message across many media, and that’s where the true power of effective marketing communications lays.
I read in The Sunday Times last week (4/11/12) about Chris Lee of Bath Empire. He focused his business in one area (something we advise our clients to do) and in his first year (2008), generated sales of £1m. The Sunday Times quotes: “An aggressive marketing strategy helped drive up the figures quickly. “I gave the marketing team £500 each day to spend on advertising and promotion. It was an investment I don’t regret,” said Lee. The sales target for Bath Empire this year is £14m.” Very respectable after just four years.
OK, so you may not have £10,000 a month to invest in your marketing, but the lesson here is the same as I’ve seen throughout my corporate career: the more budget you invest in marketing, the more results you get. Pull in your spend, and the opposite is likely to happen.
So, start with our rule of thumb and go from there. If you need to bounce the figure off an experienced marketer, then do feel free to give us a shout – we’re always happy to give a quick piece of free advice.
Bye for now!
Dedicated to your success,