Now that you have decided to take the leap and invest in digital marketing services for your company, you have to decide how much you want to commit to it in terms of spending. Do you want to allot funds monthly, weekly, or take a one-time spend? This post is our guide to help you decide just how much you need for the best results.
1. Identify your sales cycle
Your sales cycle or funnel is a critical component of your marketing budget because it will determine where you spend your money. It is the process that your audience goes through before it becomes a paying customer. There are usually four stages in a sales cycle:
- Awareness – Your audience know they have a problem and are looking for solutions
- Consideration – They look at options available to them
- Decision – The audience narrows their focus on businesses that bring the best solution for their problem or need
- Action – They choose your business and become a customer
You need to budget more money for strategies that help get your leads from consideration to the action stage.
2. Identify your outside costs
When preparing a budget, you need to know how much everything costs your company to allocate marketing funds.
Here are some outside costs you need to consider:
- Operational costs (to create products and ship them)
- Staff salaries
- Day-to-day costs for running of the business (electricity, water)
Not only do your external costs determine your allocation, but they also set a basis for your return on investment (ROI).
3. Determine your business goals
You need to know what you want to achieve before you can set a budget to achieve those goals. When setting business goals, make sure they are specific, measurable, achievable, realistic and timely (SMART).
For example, you need to set SMART goals such as:
- Increasing sales by 20% by the last quarter of 2021
- Generating 30 leads by September
4. Understand your market
Understand how you stack up against the competition – and you will understand how much to budget to catch up to them (if you need to improve) or to surpass them (if you are already leading).
Perform a competitor analysis to see where your competitors are investing their funds – and you can decide which strategies to send your money to.
Accordingly, you allocate the money for the winning strategies only.
Knowing and choosing
Investing in digital marketing was a wise decision, but deciding where the money goes is absolutely essential to get the best returns. The Bumblebee Branding Company in Chennai, India can provide help for budget analysis.