At Kinesis, we work with businesses of many shapes, sizes, and growth stages. Some have humble beginnings with modest goals (such as steady 10 percent growth each year), while another just achieved their insanely-aggressive goal of nearly 1,000 percent year-over-year growth.
As a result, we get an array of questions — everything from “How much money should I spend on marketing?” to “Which marketing tactics work best?”
But perhaps the most important question is one that faces not just marketing, but every business unit: Whatever my budget, how do I maximize return on investment?
While there is no one-size-fits all, we’ve identified some common truths about creating a marketing budget. Below is our easy-to-understand guide to help you make the most of your marketing budget (regardless of how big it is).
In the early stages of a company’s growth, many businesses have not allocated a formal marketing budget (most companies at this phase of development have "hidden" marketing costs that aren't seen on the P&L, but are incurred through DIY efforts by staff and owners). These companies typically fall into one or more of these buckets:
Your motto: Pluck the low-hanging fruit. Even with little-to-no marketing budget, there are some bare-bones basics you can implement. These are building blocks that will help you scale your marketing efforts, lead generation, and sales.
Perhaps your company has just recently decided to make marketing a formal function of the business — and you’re operating with an exciting (but modest) budget. Congratulations! This is a major milestone for any small business, and it opens the door to immense possibility. The US Small Business Administration considers an allocation of 3–5 percent to be typical in this phase. These companies usually:
Your motto: Aim for medium effort, high impact. Even with a minimal investment in certain marketing activities, your business will be well-positioned for sustainable growth. In turn, you can expect a reliable stream of incoming leads. Leverage your marketing efforts to establish brand presence, grow exposure, and nurture long-term relationships with prospects and clients.
Perhaps you’re farther along the maturity curve and ready to take your marketing budget and systems to the next level. Bravo! Smart investments in long-term marketing strategies can be the catalyst for profound business growth, and you’re already well on your way. In this phase, companies often allocate 5–11 percent of gross revenues to marketing, and generally:
Your motto: Amplify the brand and gain market share. At this level, you are focused on both inbound marketing (wherein your vast reputation and expertise draw people to your door), as well as outbound strategies (direct marketing outreach to prospects).
While not all strategies on this list will be a perfect fit for all businesses and budget sizes, one recommendation rings true for all: Be vigilant about tracking progress and monitoring the success of all initiatives. If something doesn’t work, change it. If something does work, try to figure out why and consider how to magnify it. Experiment, measure KPIs, and reassess regularly… and get ready for marketing to turn from a tactical afterthought into an engine for growth.
At Kinesis, we’ve helped many companies get clarity on the best way to deploy marketing dollars. Some have become Kinesis clients, but our #1 focus is providing help and value to our fellow businesses. To learn more about what marketing solutions might be right for you, drop us a line! We’re happy to point you in the right direction.
Many business owners try to consolidate the “Sales and Marketing” role, but the two functions are entirely different. Learn why these two complimentary disciplines are so often consolidated — and why they shouldn’t be.
Growing businesses have several options when it comes to filling their marketing need. Learn the pros and cons of each approach.
Get insights like this straight to your inbox.