The amount that you spend on marketing has many different factors to take into consideration. For instance if you are starting a new business and you are well funded or going for a grant you will want to spend a larger percentage on marketing. Nobody has ever heard of you. You need to break into the market place. You will want to define who you are with your branding and put together a website, social media platforms, printed brochures, business cards and more that matches. You will want to carefully select a few strategic partnerships that can work with you to put out your marketing pieces, such as taking a spot in an annual magazine or working with someone to take part in a larger tradeshow. You may want to gather email addresses and build a loyal following using email marketing. Some time and thought should go into this process along with some study to wisely select some of the best pieces to your marketing puzzle.
Sometimes we go online and we see what others are doing, but one needs to compare apples to apples. Your company may not be coming from the same place. A well-established company such as Coca-Cola may only spend 4% a year on marketing. That still equals millions of dollars and the percentage may be enough for them because they are maintaining a presence. They are not trying to create a presence out of thin air.
Your brand new under-funded start up may need to do a lot of online marketing using profiles and setting up free channels. That may work for a while but the reality is that your business is going to have ups and downs. While you are on an upward rise financially you get very busy and you stop doing the things that got you there. That is when you better have your automation in place or else you will need to hire someone to keep the posting consistent.
So what is the right amount to spend?
There is no set number but here is the deal: You can’t afford to not be marketing. Marketing cost money, but it also is the machine that brings in money. So you can’t afford to shut the machine off or even to let it idle. The cost to stop marketing is far greater in lost sales.
In 2013 I worked with a couple of partners and founded www.cibn.ca a business networking organization in Calgary, AB. This new company had a unique advantage. As the CEO I also owned an online marketing company called www.loyal2U.ca and therefore had access to a team of people who created marketing materials and already owned a platform that could promote the CIBN across the city. By using simple online marketing strategies over and over we grew the engaged following of the Canadian Imperial Business Network to over 330,000 people in less than 9 months. The phone rings on a regular basis now as people have found us. Our blogs are viewed by a vast number of people weekly. Our posts are re-posted by fans all across the region and beyond. Sometimes we get interest in attending our events from as far away as New York City. People recognize my face and the faces of the other partners when we are out in the community. I often hear them talk about how they have been following our progress for years. That is quite remarkable for a company that is less than one year old. Why do they think that? It is because of perception. In online marketing, perception is everything. We make a bold statement online. We are everywhere. Our LinkedIn profiles are pimped out. Our Facebook pages are regularly updated. We put out a lot of new content every month and we tweet about it regularly from multiple Twitter accounts. Perception has made us as huge as our market.
You can also grow a large following of people in a relatively short period of time. Use the simple steps of marketing over and over again and invest in yourself. We invested a lot into marketing. We pulled 16 hour days to get more onto the website after the day’s work was done or to get one more blog article written. We often went without other things and took smaller paychecks. We made careful choices, watched the results and then reinvested again when something worked. We partnered with others. We bartered when necessary. We spent and spent and spent to make it happen, but now it is happening.
Do not accept the reality that nobody knows who you are. Create a new reality. Use whatever is free. Use whatever you can trade. Use your connections. Use your head and be smart. Use boldness. Use a percentage if you need to but understand that nothing equals no return. The larger you pour out your marketing, the bigger the benefits later.
The Answer To The Question
The answer to how much should I spend is this: Spend whatever it takes. Keep spending and keep trying until you are making so much money you don’t have time to spend it all. Then spend some more, create an exit strategy and sell your business. When you successfully own your business and it no longer owns all of you and all of your time, you are good to go.
Kerry George is the owner of the Canadian Imperial Business Network which is currently the largest business network in Alberta and rapidly expanding across the country. She is a serial entrepreneur/author and speaker with a zest for life and a passion to help others succeed in increasing their potential and their bottom line. Kerry has several publications and blogs that you can follow and welcomes most interaction online.