In an ideal world, business owners would have the resources to spend money on every marketing channel they think may be worthwhile. But in the real world, there usually aren’t enough resources to try everything—you have to make choices about which marketing channels to invest in, and which ones to hold off on for the moment.
Offline or online? Website rebuild or paid advertising? Content generation or SEO? It can be difficult to make these decisions when you aren’t sure which ones would pay off. Here are four ways to think about your marketing budget that can shed some clarity:
Put together an explicit strategy
One of the strangest phenomena we’ve seen in our years in business is marketing departments that operate on a principle of spending this year’s budget in full no matter what, to ensure the budget isn’t cut in the following year. This can easily lead to indiscriminate spending for spending’s sake.
Avoid this by putting together a formal marketing strategy that can inform your spending decisions throughout the year. The easiest way to do this is to phrase it like a scientific hypothesis: “we think that if we invest in ________, ________ will happen,” and then test those assumptions.
Play off your strengths
Above all, the marketing department’s job is to make money for the company. When deciding where to put your money, ask yourself who your customers are, and how they usually find you. This is a great first place to invest in, because when putting together a marketing budget from scratch, step number one should be to cover your core competencies.
If most of your sales are at your brick and mortar store, find a way to get more people in your store. If most of your sales are online, find a way to drive traffic to your site. Once you have these basics covered, you can move on and do more creative or long-term marketing activities.
Avoid spreading your budget too thin
You may be tempted to spend a little bit on a variety of marketing channels to “cover your bases” or to avoid missing out on an opportunity. Avoid this temptation. The adage of doing one thing well instead of many things poorly applies here.
For most marketing channels, whether we’re talking about direct mail or online content creation, you need an adequate initial investment to actually create an impact. If you spend a little bit on everything, you run the risk of doing none of those things adequately and getting no return at all for your investment. Instead, invest in just a couple of channels if that’s what your budget will allow, and get these channels to function well (and become revenue positive) before moving on to other marketing channels and doing the same thing.
Resist the temptation of expensive tools
We live in the age of data, so every week business owners find out about exciting new marketing tools that have the promise to improve their business. Before they know it, their marketing departments are weighed down by multiple subscriptions to tools they barely use and that they don’t derive much value from.
This is not to say that you should close your mind to new technology—instead, just make a policy that you’ll evaluate every new tool at the six month mark to see if your team is actually getting any use out of it, and cancel it if the answer is no.
Do you have your own marketing investment strategy that has worked well for your company? We want to hear about it! Let us know in the comments below.