How To Set Marketing Budgetary
“While performing #Marketing #Budgetary, Every #Enterpreneur/ #Businessman thinks of common question that When & How much to spend on Marketing”
Spend 5-10% of #revenue on marketing for a stable business, but increase to 10-20% (or more) for aggressive #growth, especially for #startups or in #competitive industries. To determine your “when,” allocate funds when your company goals, resources, and #marketing_strategy align, such as during growth phases or to meet specific #objectives like market #expansion.
“When to Spend?”
1. During Growth Phases:
Startups or businesses aiming for aggressive expansion should invest a higher percentage of their projected revenue to fuel that growth.
2. To Achieve Specific Goals:
If your goal is long-term brand building, #customer_acquisition, or entering a new market, increased marketing investment is necessary.
3. In Response to #Market_Dynamics:
In highly competitive industries or when facing market contraction, a higher marketing spend may be needed to maintain market share and compete effectively.
4. When Resources Align:
A sound marketing budget occurs when your company’s goals, resources, and the potential of marketing activities intersect.
“How Much to Spend?”
1. Revenue Percentage (Rule of Thumb):
@Stable_Businesses: 5-7% of revenue is a common guideline.
@Aggressive_Growth_Businesses: 10-20% or more is more appropriate for high-growth companies.
@New_Businesses: Base the investment on a percentage of your desired end-of-first-year sales to fund initial market entry.
B2B vs. B2C:
B2C (Business-to-Consumer) companies often spend more on marketing, around 10% of revenue, compared to B2B (Business-to-Business) companies, which typically spend 2-5%.
Industry-Specific Needs:
Some industries, like pharmaceuticals or consumer products, require much higher percentages (20-50% of revenue) due to high competition.
Consider Total Marketing Costs:
Remember to budget for more than just paid advertising; include costs for PR, events, tools, and software needed for your marketing efforts.
Analyze and Adjust:
Your marketing budget isn’t fixed. Monitor your campaigns’ success metrics and adjust your spending allocation to the channels that are performing best.
