Marketing

How to Set a Marketing Budget that Fits your Business Goals and Provides a High Return on Investment

By Caron_Beesley, Contributor
Published: June 4, 2012 Updated: January 9, 2013

Whether you run a small business or a multi-million dollar corporation, marketing is essential to your profitability and growth. Yet many small businesses don’t allocate enough money to marketing or, worse, spend it haphazardly.

I recently got to know a business that was investing heavily in developing a hip, niche product to add to its already very cool product line. Seemed like a sure winner. However, it quickly became apparent that product development had occurred in a silo, while sales and marketing were off doing their own thing. The result? The week before launch, the business found itself with a fantastic product on its hands, but lacked a go-to-market plan or promotional material for the new product. 

In a panic, an expensive PR firm, social media strategist, and marketing consultant were all pulled in to help drive awareness of the new product. Within a few weeks, the budget had run dry and the business had to quickly revisit its overall operational and sales and marketing strategy, while moving forward on a shoestring.

Products and services don’t sell themselves. By ignoring marketing until it’s too late, many small businesses risk hitting a brick wall and, quite possibly, failing. A hip and trendy product line shouldn’t rely solely on ongoing product investment and word of mouth.

But how much money should you allocate to marketing? And how can you spend it wisely? Here are some tips that can help you do both:

How to Calculate your Marketing Budget

Many businesses allocate a percentage of actual or projected gross revenues – usually between 2-3 percent for run-rate marketing and up to 3-5 percent for start-up marketing. But the allocation actually depends on several factors: the industry you’re in, the size of your business, and its growth stage. For example, during the early brand building years retail businesses spend much more than other businesses on marketing – up to 20 percent of sales.

As a general rule, small businesses with revenues less than $5 million should allocate 7-8 percent of their revenues to marketing. This budget should be split between 1) brand development costs (which includes all the channels you use to promote your brand such as your website, blogs, sales collateral, etc.), and 2) the costs of promoting your business (campaigns, advertising, events, etc.).

This percentage also assumes you have margins in the range of 10-12 percent (after you’ve covered your other expenses, including marketing).

If your margins are lower than this, then you might consider eating more of the costs of doing business by lowering your overall margins and allocating additional spending to marketing. It’s a tough call, but your marketing budget should never be based on just what’s left over once all your other business expenses are covered.

Spending Your Budget Wisely

Knowing how much you have to spend on marketing is critical; even more critical is how you spend it.
This means having a plan.  Your small business marketing budget should be a component of your marketing plan, outlining the costs of how you are going to achieve your marketing goals within a certain timeframe.

To get a sense of what your plan should include, take a look at this article from SBA guest blogger, Rieva Lesonsky: Does Your Business Have a Marketing Plan? Also check out How to Cut Your Marketing Budget and Build Your Brand Profitably.

Revisit Your Plans Often and Track ROI

Once you have developed your marketing plan and budget, remember that it needn't be fixed and inflexible. There may be times when you need to throw in another unplanned campaign or event. At the end of the day, knowing whether it your spending is actually helping you achieve your marketing goals is more important than sticking to your budget.

Have a plan in place for measuring your spending and the impact that activities have on your bottom line. Compare tactics, analyze seasonal effects – was one quarter more profitable than another? Why? Above all, have patience and follow through on all your marketing efforts across the organization – it takes a village to build and grow a brand.

Some tactics are hard to measure, like the efficacy of print collateral, but you need to consider the impact of not having these branding staples in your tool kit before you reign in your graphic design and print funds.

Marketing plans should be maintained on an annual basis at a minimum, and revisited if you launch a new product/service, or if the market landscape changes.

Helpful Resources

 

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Where Does Social Media Fit Into Your Business Plan?

By Tim Berry, Guest Blogger
Published: May 31, 2012

What started as college kids on Facebook has grown up. At first it was updates and gossip and who’s a couple and who’s not. Then came Twitter and now Google+ and the reminder that LinkedIn, which started years earlier, was there too. Somebody named it social media. And now almost every business in the world is either participating, thinking about participating, or explaining to itself why not. And it’s time to relate that back to your basic business planning.

So the question is actually three questions:

1. How does your social media strategy fit into business strategy?

Like all elements of strategy, your social media has to address needs and goals. Are you looking at it to affect marketing, sales, customer service, or something else? You need to think this through.

The most common use is as a part of your marketing. Businesses use social media to reach more people and to present the business as a persona, participating in public discourse. Does it replace other more traditional marketing programs for you?  Or is it an extension of other programs? Determine how it relates to the strategic marketing process of getting people to know, like, and trust you.  Set realistic goals for realistic business functions and benefits.  Social media doesn’t do advertising well. It’s about participation and discussion, not just selling. It broadens your voice, but that doesn’t mean you’re able to just shout ad slogans at people.

Social media can extend beyond marketing into other functional areas. My favorite example is the taco truck using Twitter to announce its location every day. And we can all see some larger companies using it to soften the tone of complaints. Make sure you include these elements in your social media strategy if they fit your business and your overall strategy.

What matters is that you position your social media with its business function in your business. It’s not just doing it because everybody says you should. Think of the business benefits.

2. More important, how will you execute that strategy?

Social media is littered with the remnants of business efforts that failed. That includes blogs with only a few posts, Facebook pages left unattended, Twitter accounts that are inactive, and so on. That’s because so many people think it happens automatically, when in fact you need to manage the work involved.

One of the biggest fallacies in business social media is the idea that it just happens in your spare time. The accounts are free, but the updates take time and effort.  Here’s where your business planning becomes very important: figure out where that time and effort is coming from. Who is going to do it and where will they find the time to do it? If you and your people are already working well, how then do you add this new set of duties into the mix? Is there spare time to dedicate to this? What will people not be doing so they have time to do this?

Good business planning involves not just high-level strategy but also day-to-day execution. Make sure your plan includes the details of what you expect to do with your various social media accounts, who is responsible, and how will you measure results.

3. And even more important, how will you track results?

This is always a good question for business planning: As time goes on, how will you know whether you’re executing or not? With social media, as with any other component of your business plan, you develop your metrics as part of the plan. By metrics I mean numbers such as Facebook likes, Twitter followers, mentions, retweets, pluses, and so forth. There are tools for social media measurement available on the web (just search social media measurement and you’ll see).

The main thing is having the discipline to not only track but also to follow up with reviews and revisions.  Your original plans will need changing. Unforeseen factors will require reviewing goals and metrics, changing responsibilities, and adjusting the strategy. Like everything else in your business, the planning, which includes regular review and course correction, is what ends up generating the management and steering the business. 

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including his latest, 'Lean Business Planning,' 2015, Motivational Press. Contents of that book are available for web browsing free at leanplan.com .

7 Ways to Use Facebook to Grow Your Email Marketing List

By Caron_Beesley, Contributor
Published: May 31, 2012 Updated: September 15, 2016

Do you have a great e-newsletter program? Looking to build your list of email subscribers while you offer more valuable content to your Facebook fans?

Facebook and other social media are great tools for building connections and community for your business and its customers. But Facebook isn’t always the best outlet for communicating your most important updates. Newsfeeds are busy places, and it can be hard to get the attention of fans as easily as a newsletter or email update can. But how can you convert your fans to email subscribers and get them onto a list you can segment, target and own?

If I’d written this blog a year ago, many of the recommendations listed below would be quite different. But Facebook is ever-evolving, and the introduction of the new Timeline in March this year has changed the way page managers and brands use Facebook. For example, many marketers relied on the once ubiquitous “Welcome” tab as a tool for welcoming new fans and signing them up for newsletters – that feature is now gone.

So, in the new world of the Facebook Timeline, here are seven ways you can use your page to grow your email list.

1) Find a Home for Your E-Newsletter Content

Before you do anything to your page, make sure you have a home for your e-newsletter archives and a clear sign-up page (both hosted on your website). This gives you both the opportunity to extend the life of your content, and a URL you can share via social media, and clearly shows fans what they can expect if they sign up.

2) Consult Your Email Marketing Tool/Software

Chances are that you are sending your e-newsletters out with the help of an industry email marketing tool or software. Check what features your provider offers. Many include apps you can customize and add to your Facebook page to help you drive email sign-ups. They show up as boxes underneath your main cover photo. Plus, they automatically integrate new opt-ins to your subscription database.

Many email marketing providers also let you build custom email sign-up forms or pages within Facebook.  

3) Add a Sign-Up App

Before you embark on any DIY app building, consult the tools you may already have in your armory. If you don’t have access to custom apps or you just want to build your own, the good news is that the Facebook Timeline offers many more options for building apps (such as an email sign-up box and page) than the old format did. The options for incorporating your brand look and feel are also limitless.  

To see an array of these apps at work, check out social media guru Mari Smith’s Facebook page. Mari uses boxes and apps in many ways to communicate content and link to resources. Mari herself offers lots of advice and options on how to create these apps here. This blog post from ProGravix explains the step-by-step process of creating a custom Facebook business page tab for the new Timeline layout.

Once you’ve added your email sign-up app or box, be sure to make it more prominent. Just hover over the “Edit” button and select the tab you want to swap it with from the drop-down menu.

Tip: A very important point to note about calls to action in the new Timeline is that you can’t add any promotional language or graphics to the main cover image (this includes email sign-ups).

4) Optimize Your “About” Description

You probably noticed that the new Timeline page lets you add a 150-character description of your business underneath your profile picture. Use this real estate to add a link to an email sign-up page, or if you have a sign-up box or app, post a link to it here.

5) Highlight or Pin Updates About your E-Newsletter

It’s always been a good strategy to remind your Facebook fans about your e-newsletter and encourage sign-ups using regular page updates. But now you can get more exposure for these posts by pinning them to the top of your update feed for seven days. Alternatively, you can showcase them using the highlight tool (where the post expands to the full width of the page).

6) Offer Incentives

Ideally, your newsletter content should be compelling enough to sell itself, but why not run an occasional contest to encourage sign-ups via Facebook?

7) Be Proactive About New Sign-Ups and Make Your Content the Best it Can Be

Now that you’ve got the attention of your Facebook fans, make them feel welcome and keep them interested with great content.

Set up automatic welcome emails to new subscribers with a link to your latest newsletter, your blog, and so on. Add social sharing features to your newsletter so your content is constantly being spread virally. Don’t forget: if your content isn’t valuable or worth looking forward to, your time is better served investing in other outreach strategies.

Related Articles

 

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

How to Use Green Marketing Effectively in Your Business

By Rieva Lesonsky, Guest Blogger
Published: May 24, 2012

Does your small business sell a “green” product or service—one that benefits (or at least doesn’t hurt) the environment? Then you could benefit from Americans’ desire to go green when shopping. According to the 2012 Cone Green Gap Trend Tracker, 69 percent of American consumers always or sometimes take the environment into consideration when making choices about what products or services to buy.

But not so fast. Before you launch a green marketing campaign, there are some key things you need to know to avoid major missteps that could bring your business down. Specifically, consumers are leery of companies’ green claims, with just 44 percent trusting companies about their green credentials. So how do you tread the straight and narrow when marketing green?

Understand what motivates green purchases. It’s not just about doing good. Although 88 percent of green shoppers want to do what’s right and 85 percent want to preserve the environment for future generations, the biggest factor—cited by 90 percent—is the desire to save time or money in the long run. In other words, your product or service has to meet the same criteria as any purchase would—you don’t get special treatment for being green. 

Be specific. As I mentioned above, consumers are highly skeptical about green claims, so you need to spell out in plain English exactly what makes your product or service environmentally friendly. Stay away from complex or vague statements or scientific terms that are hard to understand and likely to make customers suspicious. Instead, keep it simple. Using symbols of any green certifications you possess is a smart move; these influence 80 percent of consumers to buy. You can also explain how the product helps the environment, such as “uses less water.”

Educate customers and prospects. Education is key when differentiating many green products and services from the competition. Your website, packaging, ad copy and other marketing materials should explain the benefits of your product or service, not just to the environment but to the customer as well. For example, low-energy light bulbs cost more than standard bulbs, but because they last longer, they can effectively be marketed citing the benefit that they eliminate the need to frequently replace bulbs in hard-to-reach places. If your product is priced higher than similar, non-green products, that’s not necessarily a deal breaker. Just be sure you spell out how your product is a better value in the end because it lasts longer, saves on energy costs or can be re-used.

Be honest. It’s easy to get a bit flowery and over-the-top when you’re writing marketing copy, but with a green product or service, you must be particularly careful not to overstate your green credentials in any way. If your customers—or your competitors—find out you’re not being 100 percent honest, it could backfire on your business in a major way. The Cone study found that when consumers feel a business is making false claims, 77 percent will boycott the company.

Walk the talk. In addition to the content of your marketing message, you need to consider how it is delivered. For example, if you announce your new green product by mailing a hard copy press kit to dozens of media outlets, your environmentally friendly message will get canceled out by the sheer waste of paper. If your organic skin-care products are shipped to stores packed in oversized boxes with Styrofoam peanuts, someone’s going to notice the disconnect and, in today’s transparent world, the negative word-of-mouth will spread fast.

Follow these simple principles, and marketing green is easy. Making sure your company lives up to its green beliefs in every way is the best way to not only help the planet, but grow your sales as well. 

About the Author:

Rieva Lesonsky
Rieva Lesonsky

Guest Blogger

Rieva Lesonsky is CEO and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva and visit SmallBizDaily.com to sign up for her free TrendCast reports. She's been covering small business and entrepreneurial issues for more than 30 years, is the author of several books about entrepreneurship and was the editorial director of Entrepreneur magazine for over two decades

SlideShare: 4 Ways to Use It

By smallbiztrends, Guest Blogger
Published: May 17, 2012

If you thought of Slideshare.net as just a place to load a few old presentations in the hopes someone may stumble upon them there, you’re missing out on some of the benefits of participating in SlideShare as a social network.  Here are four reasons to add SlideShare to your social media outreach, especially if you are a consultant, business service provider such as a marketing firm or accounting firm, or any other small business that engages in content marketing:

1. Repurpose Your Content  

If you produce content as part of your marketing outreach, you’re probably spending a fair amount of time and/or money to create worthwhile content. Make it work harder for you! PowerPoint presentations are ideal for uploading at SlideShare. But don’t stop there. Any kind of standalone document such as a whitepaper or case study can be uploaded. You can even repurpose your best blog posts.

What are the advantages of placing content on SlideShare? Content in otherwise cumbersome forms, like PowerPoint presentations, becomes more accessible online. Once on SlideShare, content is easily shareable and embeddable, including in other social networks like LinkedIn and Facebook, and on other blogs. Your content becomes “portable” and that means it can spread farther and wider – spreading your brand farther and wider.

To share content in your Slideshare account on LinkedIn, first log in to LinkedIn. Then find the SlideShare Presentations application in the LinkedIn app directory. Add the Slideshare app to your account.

To use SlideShare on your Facebook page, log on to Facebook. Then search on Facebook for the SlideShare app. Then click the link to “Sync SlideShare.net Account.”

2. Grow Thought Leadership

One of the ways to gain visibility for your business is to build a reputation as a thought leader. Let’s say you recently spoke at a high-profile event or professional conference. If you load the accompanying PowerPoint, or even a transcript of your remarks, onto SlideShare, you get mileage well beyond the event or conference itself. Now you share your thought leadership with the world. 

Your presentation or remarks have the potential to get in the search engines, so that anyone looking for information on the topic of your presentation may find you. Assuming the subject of your presentation relates to your business (of course you will make sure of this!), you call attention to your company and build brand awareness for it in the process.

3. Build Your Knowledge – and Your Team’s Knowledge

So far we’ve talked about using SlideShare in a marketing sense. But SlideShare can also be used to improve your own knowledge and as a resource for your staff.

Looking for information on a particular topic – say an employee policy? Check out what’s on SlideShare.  Often policy documents and other in-depth documents are shared there.  You may find something that you and your staff can learn from. 

SlideShare has an active community base, which means that the site is a rich resource of information and knowledge on a wide range of topics. It can help you master new topics quickly and stay on top of new developments. And if you are looking to hire a service provider, you may find one through a presentation or document they’ve generously shared. If you find it valuable, contact them! 

4. Create Webinars

Let’s say you’d like to create webinars and you want to archive them for people to go back to and review again.

Did you know you can create webinars using SlideShare?  To create a webinar, you upload PowerPoint slides (or a PDF of them) into Slideshare. Then you use the Create SlideCast option. You upload an audio recording in MP3 format of yourself talking through your slides. Then you just have to sync it with your slides. Voila! A webinar.

Slideshare.net has a lot to offer if you learn to use it.  The basic account there is free to use – explore it today.

About the Author:

smallbiztrends
Anita Campbell

Guest Blogger

My name is Anita Campbell. I run online communities and information websites reaching over 6 million small business owners, stakeholders and entrepreneurs annually, including Small Business Trends, a daily publication about small business issues, and BizSugar.com, a small business social media site.

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