There has always been a large topic of discussion within companies about how much should be spent on marketing themselves. Usually the answer people come back with is along the lines of “As much as it needs”. This answer is actually much more useful than it first sounds. But with the large number of businesses operating today, their budgets for marketing are subject to a variety of different factors. So when considering an everyday small business there are three main points to look at.
As Much as It Needs
A new business that has just been brought together will have no customer base, therefore it may actually require between 75-80% of the current resources going into marketing. As the business begins to gather momentum, this percentage can be slowly reduced down to around 40%. Then once business really picks up, it can be tapered down further to around 20%. This can actually be dropped to slightly less when the company has broke even and seems stable.
However, most people who consider themselves to be entrepreneurs often don’t like the sound of this answer.
In the Beginning, Start up Businesses Will Require Much More
A little over three quarters of all new business start-ups invest the majority of their resources into creating the product. Often these people believe in the back of their minds that customers will come flocking in once the product is released. This is often due to the entrepreneur’s high passion and belief in their products and services. However the actual sales are what are going to generate the income to run their business. No sales, no business.
There is a large variety of aspects which can be categorized under marketing including logo creation and the designing of the product. This can be considered as a form of soft marketing. Whereas on the other side you have other activities which will create genuine inquires and interactions with individuals, thus leading to a number of actual potential customers. This can be thought of as direct marketing.
Ask for the Order with Direct Marketing
Results from direct marketing methods can provide much more efficient use of resources and generate more potential customers straight off the bat. This marketing strategy can be simplified and explained using two basic principles.
Lead Generation – By offering your viewers/readers something of value, helping them understand their problems, you can also offer them a solution. The solution you offer is going to incorporate your services or your products. You can use this to your advantage as it will help you to create a list of potential clients who are likely to be very interested in what you have to offer.
Direct Sales – Your website or advert should contain all the required information about your product or service. Then on the same page or advert an attractive offer can be directly made to the potential customer. This is asking for the order.
Though these steps may seem quite simple, when properly executed they can be very effective marketing techniques. So when considering how much you should be spending on marketing, you should consider how many clients you actually need to stumble across your services for your business to stay afloat.