{"id":526,"date":"2019-11-01T08:32:19","date_gmt":"2019-11-01T08:32:19","guid":{"rendered":"https:\/\/www.golevo.com\/blog\/?p=526"},"modified":"2022-07-29T07:16:42","modified_gmt":"2022-07-29T07:16:42","slug":"five-tips-to-set-a-marketing-budget","status":"publish","type":"post","link":"https:\/\/www.golevo.com\/blog\/five-tips-to-set-a-marketing-budget\/","title":{"rendered":"“How much should I spend on marketing?” Five tips to get the most bang for your marketing buck."},"content":{"rendered":"

\"How<\/p>\n

Marketing is one of the most important things your business can do. Sure, as a full-service marketing agency, you’d expect us to say that, but it’s absolutely true!<\/p>\n

After all, say you make the greatest product or provide the best service. If no one knows about it, no one will buy it. Even if it’s the best thing since Snapchat. <\/p>\n

So, now that we’ve all agreed that it’s essential, the big question is\u2013how much should I spend on marketing?<\/p>\n

We have this conversation with clients all the time. With literally hundreds of marketing tools, tactics, media buys, and agencies out there, it can be overwhelming to figure out how much your company should spend, and which will give you the most ROI.<\/p>\n

Over the years we’ve seen many marketing gimmicks come and go and we’ve seen what works, and what doesn’t. So, here are our top five tips to get the most bang for your marketing buck.<\/p>\n

\"How<\/p>\n

Tip #1 \u2014 Change the way you think about your budget.<\/strong><\/p>\n

Succeeding in marketing starts with your mindset. No, this isn’t some “just think positive”, self-help advice. It’s looking at marketing as a benefit, not a burden, to your bottom line. In other words, marketing isn’t a necessary evil; it’s a necessary good!<\/p>\n

So let’s start here: you’re not spending<\/em> money on marketing, you’re investing<\/em> in marketing. The distinction is important. For example, you probably invest a certain amount of your paycheck into retirement in the hopes of a return-on-investment. Marketing is the same way; you’re investing a certain amount of your business’ revenue in order to increase your business’ profits (i.e. your return-on-investment). <\/p>\n

So how much should you invest? We’re glad you asked!<\/p>\n

Tip #2 \u2014 Follow the 5% Rule<\/strong><\/p>\n

You should spend at least<\/em> 5% of your sales revenue on marketing. Yep, it’s that simple. If you remember just one thing from this article, it’s that.<\/p>\n

Does 5% seem high? Actually, it’s quite reasonable. The U.S. Small Business Administration recommends spending up to 8% of your gross revenue for marketing if you’re doing less than $5 million a year in sales. If you’re a new company, some analysts even say you should spend up to 20% on marketing! Established companies have it a little easier, but are still encouraged to spend 8-12%.<\/p>\n

So you’re probably thinking: “Wait, 5% seems like a lot, but is it actually not enough?!” It’s important to remember “the 5% rule”<\/strong> is more of a guideline, and applies to most years, not all. You should absolutely make marketing a top priority and if you feel like you can invest more, you should. But your marketing budget should always be at least 5%.<\/p>\n

We like 5% as a baseline because it gives you a nice, solid foundation to build on. It also gives you enough flexibility to see what marketing executions work best for your business (more on that later). There’s nothing worse than spending too much on a marketing execution that isn’t working. Which leads us to our next tip.<\/p>\n

Tip #3 \u2014 It’s not just how much you spend, but how you spend it.<\/strong><\/p>\n

If you’re a local coffee shop spending 5% of your revenue on a billboard campaign in a completely different state, that’s not a good strategy. Most marketing mistakes aren’t so obvious, which is why it’s important to consult with experts<\/a><\/strong>.<\/p>\n

How you market is unique to your business, but your marketing budget should always include the following four things: <\/p>\n