Have you set your marketing budget for 2016? We have simplified the process for you!
This is a great introductory budget formula. There are many ways to approach creating a marketing budget but we feel like this worksheet allows businesses to get a strong high level view of what budget is needed to reach sales goals.
A few ideas to help:
2015 Marketing Spend–This is the total amount of money spent on marketing efforts and should include advertising, networking groups, vendor fees, etc. Anything that what used specifically to advertise your business. This should NOT include one-time budget items like website or logo design. It should also NOT include items that are the “cost of doing business” like website hosting, shopping bags, storefront signage, etc.
# of Buyers in 2015–This should be the total transactions during 2015 NOT unique buyers. A retail store might have thousands while a consultant might have less than twenty. Each transaction should be the total of all items purchased.
Average Ticket is 2015–This is why that # of buyers is important. Knowing your average ticket is incredibly important when developing a budget. Gross sales/#of buyers=Average ticket. When you know how much is typically spent you know how many transactions you need to reach your goal!
Now that you have your marketing budget, how should you spend it? We will be talking strategy the next few weeks! If you would like some assistance creating your 2016 budget and marketing strategy shoot us an email at firstname.lastname@example.org.Read More >>
It seems like there should be an easy way to figure out how much to spend on marketing each year. You will find many different formulas doing a basic Google search but how do you know which one to choose?
The key is what you are trying to achieve.
If you have not tracked your return on investment (ROI) in the past, my recommendation is the 5/10/15 Annual Sales approach.
If you are an established business with a well-known brand within your target demographic, multiple your annual sales by 5% to determine your marketing budget. On the other hand, if you have strong growth goals or have struggled to maintain your position in the market, you should plan to spend 10% of your annual sales. New businesses, (or if you are introducing a new product line or service) should determine the anticipated annual sales and base the marketing budget off 15%.
When you look at the end number you may feel it is too high, and it could be if you are not approaching your marketing in a strategic way. A budget is simple a number until you put it into action. Tracking your ROI moving forward will help provide a better formula for YOUR business next year.
Want to learn more? Shoot us an email at email@example.com.Read More >>