Cost management is always going to be a key part of your business model. This is true regardless of the section of your company that you are managing. For instance, you need to make sure that you don’t overspend on your marketing campaign. At the same time, you need to ensure that you don’t go too low with your marketing budget. This can leave you in a situation where you won’t see any results on the level that you want. So, how much should you be spending on your marketing campaign? Well, the answer is quite simply that it depends, so let’s break it down.
The Size Of Your Business
The size of your company is always going to factor into how much you should be spending on your marketing campaign. Obviously, larger companies will be able to spend more so an SME business owner needs to be savvier. One example of this would be with an AdWords campaign. Establishing a campaign like this, it can be tempting to seek out the most commonly used keywords. However, it’s far more cost-effective to choose less competitive keywords. You will attract a smaller user base but you will also potentially gain a higher level of conversions. The reason for this? It’s more likely that the ads will be relevant to the users who see them.
Your marketing technique will also impact the cost. Certain marketing techniques are far more expensive than others. For instance, a social media campaign will usually – though not always – be a lot cheaper to run compared with other options. This is particularly true if you get a good social media manager at a reasonable cost. You can save money if you are running an SME by ensuring that you use a freelancer or outsourcing agent. This is always going to be far more budget-friendly compared to hiring a marketing team in house.
You do have to be careful that you select the business carefully. Otherwise, there can be issues with the quality of the service provided.
What Is The Average Cost For Marketing?
Of course, one of the easiest ways to understand how much you should be spending on marketing is to check on other businesses. Typically, a small business will spend between 7 and 8% of their gross revenue on marketing. If you are already using this much to promote your business you will be on the right track. Again, this will always depend on your size. While some companies will be spending upwards of $100,000 on marketing, others will only need to spend $20,000. It all depends on the level of the market share that you are seeking. Don’t forget, smaller businesses can also save by using clever tactics like a paypal business account. This cuts the lost revenue that can occur through Paypal transactions.
We hope this helps you understand everything you need to know about your marketing costs and why it’s important to guarantee that you are spending the right amount. If you get this right, you can guarantee that your business remains cost-effective while also getting the level of traction that you want with your company.