How Much Should You Spend on Marketing – 6 Tips

– So how much should
you spend on marketing? In this video we break down six tips on how you can determine just that. Hi, I’m JB with Marketing 360. And we help small businesses grow with our marketing and
design, talent, technology through our number one marketing
platform, Marketing 360. We call marketing and design, MAD. We love MAD and hopefully these videos will help you fall in love with MAD too. So make sure to follow
us to learn tips, tricks and strategies to grow your
business and fuel your brand. So how much should you spend in marketing? This is a question that we hear a lot and the short answer is, if you’re getting a positive return as much as you can, right? If you’re getting a positive return, if I’m giving you a dollar
and you’re giving me two back, you just wanna put as
much into it as you can. But the question is, when you’re starting,
where do you start with? What’s a good starting point? So let’s talk about six tips on how you can maybe determine
a good starting point for your marketing budget, for your brand. Let’s check it out. So tip number one is to go with what Harvard Business School put a report out on many years ago. Which is to invest between
seven and 15 percent of your revenue back into marketing. And so what that means is, if your revenue was $100, 000 a month, you wanna reinvest between
$7, 000 and $15, 000 a month in marketing to sustain
that and continue to grow. And so if you don’t have existing revenue, think about your goal, maybe your goal is to
have $100, 000 in revenue. And so you would wanna invest between $7, 000 and $15,
000 a month in marketing in order to have your best
chance at achieving that goal. If your goal is only $10,
000 a month in revenue, you need to invest about $700 to $1, 500 in order to achieve that goal. We’ve seen this to be extremely
accurate over the years and generally what we recommend
is for a mature business that has an existing customer base seven percent to 10% is pretty effective. If you’re a fast growing or a new business that’s trying to get out there, 15% is probably gonna be a
better starting point for you. And so we’ve seen this
to be extremely accurate, it’s a real easy way to determine what your
marketing budget should be in order for you to achieve your goals and grow your business. Tip number two would be to
determine how many leads and or sales you wanna
achieve during the month. So lets just think about this, maybe you have a team of 10 sales people and each of those sales people
needs 100 leads a month. That would be 1000 leads a month that you need to feed those sales people in order for them to open enough accounts for you to reach your goals. So that’s easy, right? Question is, how much does
it cost to get 1000 leads? Try to determine what your
expected lead cost would be and then just simply multiply that by the number of leads that you need. This can help you determine a
good marketing budget as well. So if you’re a growing company and you’re gonna be hiring people and adding sales people over time, you’re gonna need to increase
your lead flow, right? And so you’re gonna wanna
increase your budget in order to meet that
demand and deliver to them the number of leads that they need and so you can pre-plot and understand what your marketing budget should be. If you don’t know what your lead costs is, there may be some experimental time, maybe invest enough budget
to experiment, test, try to gain an understanding
of what your lead cost is. Once you know that though, it’s almost like a mathematical certainty if you invest a certain amount of money, you’re gonna get a certain amount of leads and or sales if you’re an e-commerce store and you’re gonna be able
to achieve your goals. So that’s another way to think about how to determine
a good marketing budget and grow that budget over time. Tip number three is to invest
enough to be competitive. Marketing is fair but its not free. Its a competitive natured business, you’re gonna always have a
competitive aspect to it. And its gonna come down
to what you’re investing in comparison to your competitor. If they’re investing more than you and being seen more than you, its gonna be hard to capture
market share ahead of them. So for you to capture market
share and grow your business, you’re gonna need to be competitive, you’re gonna have to be
a player in the space and that comes through
investing in marketing. So what is that, what does that look like? There’s a lot of tools
out there, SpyFu is one, SEMrush is another one. You can call us and we’ll
provide the information to you for free as well as to what
your competitors are spending. You can literally look up your competitors and see what they’re
investing in digital marketing on a monthly basis and
gain an understanding of what you should probably be investing if you wanna compete with those guys and become a player as well. So think about that, invest. If you aren’t investing enough, they’re gonna continue capturing
market share ahead of you. So you wanna invest enough to compete. We can help you find that information or you can even find that
with some free tools online. Tip number four is to
invest in more than just ads and media buy, invest in talent. Because design and content is huge today, it’s so very important to
always have great content, new designs, new ads, new video ads that you’re creating on a monthly basis. And so don’t get caught up in just spending money on
Google Ads or Facebook Ads and these sorts of
things, that’s important but you need the collaterale behind that in order to see the results
that you’re looking for. So when you’re thinking
about your marketing budget, also think about spending
money on great talent, great teams and great people that can execute on those
processes, manage those campaigns and design amazing, compelling ads that are gonna really make you stand apart from your competitors. So they see your ad, pick
you and don’t pick them. Tip number five is to diversify. Invest in multi-channel marketing. Today, marketing is
complicated more than ever but the important thing
is that you understand it, have a team of people
that can execute on it and that you diversify. Don’t just run ads on Google, don’t just run ads on Facebook. Run your ads everywhere
your customer base is. If that’s Google, Facebook,
Instagram, YouTube you wanna be there because if you’re not there,
they’re not seeing you. And so you’re not capturing
that market share that you need. So you wanna be in front of
them, so be multi-channel. But outside of the ads,
invest in content marketing, invest in SEO, invest in retargeting, invest in reputation management, invest in building your social
media presence organically. When you think about your budget, you’re gonna wanna probably
split it down the middle. If you have $1, 000 to spend
a month, invest $500 in ads, running ads, ads on multiple channels and invest $500 in organic
slash social related things that are gonna help build
you organically online. So you’re gonna get lead flow from that. If you split your budget in half between paid and organic strategies, you’re gonna see the best success and you’re gonna be well diversified. Tip six, last tip. This tip is really important and its to understand
that not all marketing is created equal. I don’t know how many times
I’ve heard over the years one marketing is too expensive
than another marketing because this marketing is $150 a month and this one over here is $1, 500 a month. Well, marketing is not
all created equal, right? It’s like snow tires. You can’t haggle somebody
down on snow tires and get cheaper snow
tires for a lower price. When you pay less in
marketing, you are seen less. You get less sales, you get less leads. That’s the way that it works. So if you wanna be seen,
you have to invest. And so think about this, if you’re spending $150 a
month on a marketing program, I could just tell you right now, that’s not a marketing program. You’re getting nothing from that. You’re gonna get no results
and you’re going to fail. You have to invest more than
that to be successful today. $150 that’s driving no
results costs you $150, right? That’s $150 into the
trash and out the window. You might as well of went out to eat a couple times during the month. If you invest $1, 500 and that
drives you $1, 501 in profit, that’s cheaper than
investing $150 a month. If you invest $150 and get zero profits, and invest $1, 500 and get $1 profit, that’s actually cheaper. So what you need to think
about are the results, right? So if you’re gonna invest $2, 000 a month and get $10, 000 back in profits, you’re gonna do that til
the end of time, right? That’s the biggest no brainer
in the history of the world. You just keep doing that. You spend as much as you can in marketing ’cause you’re getting a huge return back. Whereas $150 a month program,
a $200 a month program, they’re never gonna generate
the results that you need to grow your business so
you’re wasting your money. You might as well spend
it on something else. So invest enough money
to achieve your goals, use some of the rules
that I’ve talked about, look at what your competitors
are spending, make it happen. If you really believe in your brand and believe in your business, you’re gonna figure it out, right? You’re gonna work a second job, you’re gonna do a garage sale, you’re gonna do whatever you have to do to invest enough money in
your business to get it going and to grow and if you
do that you’re gonna win. The key in business is marketing, right? A lot of people have great
ideas, great processes, great services, great products. The winners are the ones
that invest in marketing. So invest in marketing and win. So in conclusion, hopefully
this video gives you some tips on how you should invest
in your marketing, what you should invest, how you should start with your marketing and maybe some good starting points to help grow and hit your goals. If you have any comments,
please leave a comment. Leave comments with other ideas, future ideas that you
want us to do videos on, we’d love to have that in there too. If you have other tips on determining good marketing
budgets, leave those. Like the videos, share
it with your friends, follow us for more content
like this in the future. Happy marketing.

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19 thoughts on “How Much Should You Spend on Marketing – 6 Tips

  1. Love the bug crawling up the wall behind you. Good effect – I thought it was on my screen – LOL

  2. Funny, in my analytical mind, the video was shot wrong. Unconsciously, you standing on the left and the words to your right converts > the opposite. Try that for more likes on your next video. Ive Been in marketing too long 😔

  3. sir, i have a small company. i wanted to post instagram and facebook ads, but i dnt have my official website yet. which advertising objective should we use???
    It would be a great help if you could suggest the best way!

  4. Hello, good insights. I was thinking to use Fiverr for marketing and some services go for 200, 300, and 500 per month. But what you said gave me pause. If these are the cheap, no-ROI guys, who would I go to for that higher dollar marketing? I like that Fiverr centralizes services. Is there a premium work-for-hire platform where you can find and hire a team, pay more, and get more results? Basically, I don’t wanna do random Google searches. Thank you.

  5. I am currently working a second job so I can invest in my marketing and take my business to the next level

  6. A lot of good tips, if an individual does have the money to invest, where does he/she even begin to start with a campaign or marketing group that puts everyone on the same page rooting for that brand? I have heard of masterminds, etc. and still people are left in the fray of those who are informed, have more money and talent with selling products and services. I mean where does this person find this house of tools to build themselves and their cause?

  7. Hello, great stuff! One thing I'd like to ask is when we talk about $150 or $1000, do we talk total? I mean should you split that $1000 into 4 5 posts and ads or all of the budget should be spent on one post only ? For e commerce, say shoes, Would you spend all $1000 on one adv ? or Would you rather have 4 different adv of $250 each? Basically I got an idea of total budget PCM but not sure about total budget of one post ?

  8. tip 6 i believe is inaccurate, if you dont haqve £1500 to spend then surely starting with £150 and targeting that to a small group / small area is better than nothing? You can enlighten me on this if you wish

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