It’s 2019 now and things have changed: the internet revolutionized how businesses operate, which means there is, and always will be, heavy and steady competition. Operating a sandwich shop has become more difficult, and in the brutality of the internet age, businesses keep asking: how can I maximize my return on investment (ROI) with minimum marketing costs?
It’s not the easiest question to answer, especially because it raises so many other questions.
What Should My Marketing Costs Cover?
You could spend your marketing budget on billboard advertisements, but it won’t be effective if your marketing doesn’t make your business visible to your target audience. A billboard could work for a sandwich shop, but only if it’s close in proximity and sets you apart from the competition.
Put simply: your marketing costs should be used to reach your target audience at the right place at the right time.
We can’t speak to the services of other businesses, but at FiG Advertising + Marketing, our approach to digital marketing allows us to reach target audiences at the right place at the right time. We can utilize your marketing budget to cover all aspects of digital marketing, including:
Social media management
Search engine optimization (SEO)
Imagine our sandwich shop once again. If we optimize their digital assets for search engines, we can more effectively reach the target audience (hungry customers) when they Google “sandwiches near me.”
What Should My Marketing Costs Be?
This can often be an open-ended question, as it depends greatly upon your business. How long have you been in operation? Are you primarily a B2C or B2B company? What kind of marketing do you want to pursue? As digital marketing has become more prevalent in the past decade, marketing budgets have adjusted with it.
An annual survey of Chief Marketing Officers (CMOs) from a variety of industry sectors and firm sizes reported that on average, marketing costs made up roughly 11.1% of total company budgets in 2018. But, this an average from a variety of large businesses. You want to know what percentage you should allocate for your business.
At FiG Advertising + Marketing, we have found that roughly 20% of your net profit will have the maximum ROI and impact on your revenue. However, every business is different and 20% can seem like a good chunk of change. We recommend the 20% for your marketing costs, but when your marketing budget is used strategically, 20% is not a hard and fast rule. Even 7% or 6% can have decent marketing results, when utilized in a strategic marketing approach.
What Marketing Costs Can I Cut?
Hopefully, you’re able to see the value that your marketing costs can have on the success of your business, but we understand that profitable quarters can quickly become losses. You can cut as many marketing costs as you see fit, but you need to keep in mind how it will impact your business.
For instance, at FiG Advertising + Marketing, we develop digital marketing strategies one-on-one with our clients and give them the option to turn paid search campaigns on or off, for select months. While this saves the client money in the short-term, our analytics will often demonstrate how the “off” months negatively impact website traffic.
It’s also worth noting that marketing isn’t a one-time thing that you pay for. Marketing is a continuous service to drive leads towards your business in the hopes that they convert to revenue. Our sandwich shop could use their marketing budget for the billboard once and have customers for a month, but when the billboard changes, that influx of revenue will slowly drop.
The short answer: you lose revenue when customers can’t find your website, so be conscious of how your marketing costs affect your business.
At FiG Advertising + Marketing, we strive to make sure every penny of your marketing costs has the best impact possible on your business. We engage our clients in a collaborative and communicative process to design the optimal marketing strategy for their business, giving them the biggest bang for their buck.
Contact us today to see how we will optimize your marketing costs.