Marketing budgets are on the rise, and for a good reason. Research by the CMO Council found that 65% of marketers plan to increase their budgets in 2021, but how do you know which channels or tactics will work best for your business? To help answer that question, we’ve created a list of five tips that can help you spend your marketing budget wisely this year. Remember that it’s not about what works today but rather investing in what will work tomorrow.
Marketing Budget
But before we get into the tips, you may already be wondering how much your budget should be. A good rule of thumb is to spend 2-5% of your revenue on marketing for B2B businesses and 5-10% for B2Cs.
Media Spend
Media spend is the section of your budget devoted to advertising your company’s products online through ad campaigns and pay-per-click (PPC) marketing. This includes social media sites like Facebook and Instagram and search engines such as Google or Bing.
Businesses should spend around 20-40% of their digital marketing budget on paid media channels to reach new customers. This percentage tends to be greater for B2C companies, whereas B2Bs often find that content built for unpaid social channels can offer a higher return on investment.
Unpaid Channels
Unlike pay-per-click advertising, unpaid channels are free to use. You don’t have to pay for your views and clicks. These channels include blogs, YouTube videos, and social media sites such as Facebook and LinkedIn.
However, although you do not have to pay for each click or impression on these channels, they still require some investment. For example, you may need to hire a copywriter, pay for scheduling software or enlist the help of a virtual assistant.
10%-30% of your marketing budget should be spent on talent to create content for these unpaid channels. Educating the public about your products and creating entertaining content helps attract new audiences and convert leads into paying customers. Therefore, you are likely to see a great ROI with this cost-effective form of marketing.
SEO
Small businesses with a local presence should focus on search engine optimization and localization. This is a great way to make sure that customers can find you easily, and it also helps you rank higher on the search engines. It’s easy for people to find your business when your website ranks highly in Google searches— which means more potential appointments or inquiries from prospective clients going forward. You should focus between 10-30% of your marketing budget on this area, depending on the needs of your business.
Graphic Design
Companies are missing out on a huge opportunity to stand out with their marketing efforts by failing to invest in the design of creative assets for both paid and unpaid channels. You can do this fairly easily by hiring freelancers or doing it yourself using free-to-use tools like Canva, so it shouldn’t take up more than 5-10% of your marketing budget.
Customer Retention
You need to keep in contact with your customers even when spending is down. It costs far less to retain an existing customer than to acquire a new one, and they tend to spend more, too. Your best customers are those who come back again and recommend others because they trust you to deliver a high-quality service every time. When times get tough, go the extra mile to support and reassure your customers. Don’t limit your best offers to new customers, or your existing ones may feel undervalued. A few ways to reward customer loyalty include:
- Hand-written thank you notes
- Exclusive discounts
- Private sales events
- Free trials or samples of your latest offerings
Summary
Marketing will look different in 2021 and 2022. In the wake of the pandemic, the world is changing faster than ever, and business owners must learn how to adapt. To succeed in this new landscape, you need to constantly think about where your customers live online and what they do there. These shifts mean marketers have more work to do than ever before, but success can still be found through resourcefulness and creativity.