How quickly can you answer this question: What are the actual dollars budgeted towards all marketing efforts for the current year?
From my experience, most small business owners cannot answer this question. In many instances, a budget has never been created or if a budget was created, it is not reviewed on a regular basis.
The reason for this question was a fact I just read about digital expenditures by small businesses by Clutch. This research represents 351 small businesses with 57 percent of those surveyed having annual revenue of less than $1 million.
Of those surveyed, 47 percent reported spending less than $10,000 on digital marketing in 2017. Digital marketing includes websites, social media, email, content and virtual reality and augmented reality marketing.
Just two weeks ago I wrote about content marketing specific to video marketing and how cost effective this marketing is for small businesses. The research from Clutch suggests only one in four small businesses have plans to invest in content marketing.
Much of digital marketing is an inbound marketing strategy. Your digital presence draws people to your website or your social media posts. Through the use of search engine optimization (SEO), your small business can attract more inbound visits.
Since many small businesses have limited resources of time, money and energy, nearly 43 percent rely primarily on their employees to plan and execute their digital marketing, according to Clutch. The challenge happens when 55 percent of those small businesses surveyed have fewer than 10 employees. This challenge is reflected with 30 percent of the surveyed businesses reporting only one person being assigned to digital marketing.
A good rule of thumb is to invest 5 percent to 10 percent of gross revenues on marketing. If your small business is launching any new solutions (products or services) that percentage may increase to 50 percent. Marketing expenditures include not only digital marketing, but the printing of business cards, paid advertising and outsourcing talent such as content writers to marketing consultants.
By the way, did you notice I wrote the word invest instead of cost in the previous paragraph? The reason is simple when you change how you look at things, the things you look at will change. Invest suggests a positive return while cost suggests a negative return.
Of course, marketing efforts require a return on investment. If you cannot measure your marketing efforts, you are less likely to be able to manage them, to know what efforts are really generating new sales revenue.
The old expression of “it takes money to make money” still rings true today. With the first quarter of the current year now history, maybe it is time to review your marketing efforts. If you don’t have a written marketing budget, possibly now is the time to create one before the next quarter ends and your sales are not where you want or need them to be.
Leanne Hoagland-Smith is an author, speaker and executive coach. Her weekly column explores issues that impact the bottom line of firms with fewer than 100 employees. She can be reached at 219-508-2859.
