What should we be spending on our ideal marketing budget? It’s a critical question that every business needs to answer when they’re positioned to grow. The brands we all recognize got their market share by spending the correct amount they needed to invest for growth, spending a big proportion on marketing and advertising. What’s the right size marketing budget for your business? We can help you answer that, here, now, on this website, easily. To find out, please read on.
Is there a Goldilocks Formula for Calculating an Ideal Marketing Budget?
DeBeers, the diamond company devised a strategy long ago to help men proposing marriage to understand how big of an engagement ring diamond is appropriate. Their marketing people devised the concept of the 3-month paycheck rule created for diamond engagement rings; men are told that a ring that costs three times a monthly salary is a substantial enough token of devotion. Potential brides are justified in expecting no less, thanks to DeBeer’s formula for calculating the right amount of treasure other brides, like them, should be getting too. It’s treated as gospel in American culture, almost never questioned as a standard.
That’s a completely arbitrary system though, designed to benefit diamond sellers. When a business invests in marketing and advertising, the purpose is to generate impact on the bottom line. Calculating a marketing budget is based on getting definitive results: more business. The idea is similar enough though, to the DeBeers idea, to illustrate what a business has to do to woo the right amount of customers in order to sustain or grow revenue levels; the revenue level determines how much is spent on marketing and advertising.
Many marketers have been told as a general guideline: spend 10% of revenues in order to grow, spend 5% to sustain business. There’s a lot more to it than that. The exact formula for any business depends on a number of factors in almost every case, factors that are often unique to the industry, the business and the customer base. The most critical variables are, however, are the same for almost all businesses planning their marketing budget. Any calculations we do to try to render an accurate spend will take those same variables into account.
Spending Under Your Marketing Budget is a Waste of Time.
If you’ve got a business, and you’ve got people being paid to make the business money, under utilizing them is a waste of potential. If you’ve got a business in a good location with good services or products, but you’re shy about promoting it, then you’re wasting your business’s potential. If you’ve got good marketing ideas and a smart team, but not investing enough of their time or the business’s money in producing great promotions and advertising, then potential revenue isn’t earned. It goes to your competition instead. If you don’t market or advertise enough, you’re practically serving your potential customers up to your competition on a silver platter, without a fight. That’s not good! Don’t do that, but don’t waste money either. Don’t pour more dollars into marketing or advertising than is needed to keep the business flowing at a manageable pace. Make sure you’ve got an idea of the marketing budget that’s right for your company.
Our Easy-to-Use Marketing Budget Calculator
Here at Massive Impressions, we created a marketing budget calculator that answers the question: “How much should my company be spending our marketing budget?” By answering a series of simple questions, you’ll get an estimate of the type of marketing and advertising spend that’s appropriate for your company now. How you spend those dollars is critical. Don’t buy the most spaghetti you can and keep throwing it at the wall. Focusing on the right audiences, with the right strategy, using the best tactics is key.
Investing in marketing and advertising wisely involves refining a smart marketing strategy, and using today’s most effective marketing tactics. That’s where we can help you get the most return on your investment. After you know what marketing budget should deliver results, let us know when you’re ready to focus that investment. We’ll reveal the best way to grow your business, getting the most out of the marketing budget that’s will deliver the results you need, at a price you can afford.