In the US, over 4.4 million new businesses are started each year; of those, 20% fail in their first year. It is estimated that 14% of failed companies do so due to neglecting to market their business correctly or not having a big enough or properly focused marketing plan.
Your business marketing is an essential part of the company and one of the main ways you will get business. You cannot rely on word of mouth or the sales from close friends and peers to push you along forever, and with the rise of the internet, the pool of potential customers has expanded like never before.
This post examines the importance of creating a healthy marketing budget and how to do just this.
Why Businesses Need to Have a Healthy Marketing Budget
Marketing is essential. It facilitates attracting new customers, boosts sales, and raises revenues. Therefore, budgeting for it correctly, including remembering to |budget for help from a marketing consultant in Denver, is vital to be successful. When you put it like that, it’s easy to recognize the importance of a healthy budget
A successful marketing budget must be aligned with your overall objectives. In days gone past, this was limited to options such as branded items, TV and radio advertisements, cold calling, print ads, and billboards, to name a few. However, in 2023, there are a plethora of ways you can market your business thanks to the internet and reach more people than ever before in a more targeted manner for less money.
The first step is to create a marketing budget.
Creating a Marketing Budget
To create a marketing budget, start by making an extensive list of all costs related to running your business and then determine how much money is allocated for marketing efforts. Your expenses should include advertising, sales, service charges, software/equipment investments, etc., to include all relevant costs in the calculation.
You must also factor in staff costs, which typically make up a substantial part of your marketing budget. These costs include salaries, bonuses, benefits, training sessions, and parking privileges – all necessary to guarantee that employees are properly educated, motivated, and productive. However, this can be expensive, so working with an e-commerce SEO agency can help you to avoid the cost and training associated with hiring an in-house marketing team.
Another essential element in creating a marketing budget is taking into account your company’s size. Smaller enterprises should allocate a smaller percentage of their total revenue towards marketing expenses due to having lower profit margins than larger organizations.
Additionally, you should take into account your business’ stage of expansion. If you’re expanding rapidly, investing more in marketing may be necessary to maintain or increase market share.
For startups or brand-new businesses, you should allocate up to 20 percent of sales toward marketing to develop and strengthen your brand. This is particularly true for new products and services.
However, the average marketing budget for businesses varies based on industry, size, and stage of growth. Companies looking to achieve moderate expansion typically allocate 2-10% of their projected revenues towards marketing expenses; those with aggressive expansion goals may allocate 15-30% of projected earnings towards this function.
Evaluating marketing spending annually is critical for determining if it’s effective and when to reduce some expenses.
Not sure how to calculate how much to spend? One way is to use customer acquisition cost (CAC) as a benchmark to assess your marketing initiatives and determine if you’re spending too much on specific campaigns. Doing so will enable you to reduce expenses and reinvest in more successful endeavors.
Consumer Habits and Marketing Trends for 2023
In an ever-evolving technological landscape, brands must stay abreast of consumer spending habits and expectations. Automation and personalization will play a massive part in how successful your marketing plan is and the type of customers you attract. Fortunately, there are many tools on the market to help you to do just that.
Alongside this, jumping on board some of the top consumer trends can also significantly boost your marketing plan. Read on for some examples to expect this year.
1. Subscription Commerce
One trend to watch in 2023 is the growth of subscription commerce. Digital sellers and online marketplaces use this strategy to increase sales and retain customers. 35% of weekly online shoppers already use subscription models, and this number is expected to continue increasing.
Subscription models allow businesses to foster deep customer relationships, ultimately increasing brand awareness and revenue in the long run.
2. Omnichannel Marketing
Another critical marketing trend to watch is omnichannel marketing. This strategy strives to deliver consistent and high-quality experiences across all touchpoints. It involves centralizing essential information about the business and dispersing it across various marketing channels for a seamless customer journey – an effective way to build trust with your consumers.
A successful omnichannel marketing strategy involves a consistent brand image and voice, personalization, and reliance on data and figures to name a few.
Augmented reality (AR) is another trend gaining traction in e-commerce. This technology enables brands to create virtual products displayed within a user’s real-world environment, which can be effective for many industries across the board. AR gives your goods an eye-catching presentation and can also be used for lead generation and social media marketing.
Furthermore, an increasing number of businesses are turning to ad-supported streaming services to reach their audiences. This represents a radical shift from traditional TV ads and is expected to become even more prevalent by 2023.
Many marketers now utilize artificial intelligence methods to understand their target audience better. This will enable them to make more accurate ad-targeting decisions, ensuring their messages reach the right people at the right time.
Marketing automation will remain influential in 2023, allowing businesses to target their audience with highly specific messages. It is also essential to remember that this trend coincides with growing concerns about privacy and security; thus, businesses must take measures to safeguard their data.
Another key trend to watch is the rise of a young generation passionate about sustainability and ethical practices. These young individuals have grown up in a more serious climate change reality, so they want to support brands that demonstrate environmental sensitivity. Over 80% of consumers would prefer to buy from a brand that has solid ethics regarding reducing their carbon footprint and committing to supporting climate change. And as the younger generation becomes the new consumers of the future, gearing your brand ethics and marketing campaign to highlight your efforts can be an exceptionally powerful marketing approach.
In conclusion, there is no one size fits all marketing approach for any business. Using the tools at your disposal, the data you hold, and following consumer habits and marketing trends can help you to remain agile in an increasingly competitive landscape and ensure you are putting your marketing campaign to good use.