Good question. Unfortunately, there’s no simple answer. The truth is: IT DEPENDS!
Here are some of the factors to consider when planning a marketing budget:
– How competitive is your market? Are there a lot of similar businesses chasing the same pool of customers? Or are you the first company to offer your product/service in your area? More competition will likely require more of a marketing investment.
– How established is your brand? Are you a new business or have you been around for 50 years? How recognizable is your logo? Your brand colors? Newer businesses may need to spend more to gain market recognition.
– How much revenue does a new customer bring? If every new customer brings in $50k in revenue, you will likely have to spend more on marketing than a business whose average customer spends $10. (Lexus dealer v. Hot dog stand).
While there’s no easy answer, don’t give up on setting a marketing budget. Start putting some numbers on paper. To help, I put together a marketing budget spreadsheet. Download this spreadsheet on your desktop or laptop and use it as a jumping off point for your marketing plan. Contact me with questions!