What Should I Invest in Marketing? It Depends ...

When one of your clients, likely a midsize business, asks you how much your products and services will cost, your answer is likely to be something similar to "it depends." You would then ask that prospect a series of questions such as:

  • What type of business are you and how large?
  • Are you in multiple locations?
  • Are you global?
  • Are you considering an on-premises deployment or looking at cloud-based options?

And the list of questions goes on and on ...

WHERE TO INVEST?
When a client asks me how much marketing will cost each month and what type of marketing tactics will work, the answer is the same. It depends. It will depend on your business goals, the number of customers you plan to add in 2014, what you've done already (has the foundation been laid?), where the gaps lie, and what you're prepared to do to address those gaps.

$ TACTICS: Today's marketing game has changed dramatically from the days of direct mail and print advertising. In many cases, it's actually less expensive to market now since many of your buyers are online, viewing videos, reading blogs, and connecting on social media. Those tactics don't cost a lot of money to create, but a consistent presence and a constant stream of interesting relevant content is critical. And, of course, your website needs to be easily found-you can start with great content that your prospects (and search engines) love and want to share.

$ PEOPLE: Yes, you do need someone dedicated to marketing. You may think it's easy enough to get by with the intern, the part-time admin, or asking the salesperson to "manage it when you have time" but that's a strategy doomed to fail in the long run. What pushes you ahead of the competition is a strategic, focused approach that uses the marketing budget wisely. After all, why spend the money on tactics if you can't sustain them?

$ OUTSOURCE: It's not as hard as you think. Start small-offload the necessary, but time-consuming, writing tasks such as social media updates, blog posts, and e-newsletters. Then get an external writer to refresh your "About Us" page, someone who can look at your org with an objective eye. By the way, if you didn't know that your About Us page isn't about you, that's one more reason to outsource it to a pro.

$ OPPORTUNITY COST: Finally, there's the cost of doing nothing. What if you don't do anything to make your audience aware of your products or services? What if your competition does and crushes you in the process? No surprise that the rate of business failure over a five-year period is a whopping 80 percent. It's no longer an option to sit on the sidelines and hope that prospects will find and purchase from you. The sluggish economy, your not-so-sluggish competitors, and the Internet have changed the buying process. The cost of doing nothing could cost you your business.

Well, I haven't exactly answered the question of "How much should marketing cost me?" have I? Here's a general guideline: Dedicate 3 to 4 percent of gross revenues to marketing activities (don't include salaries in this amount). And if your marketing has been "light" over the last couple of years, you would be smart to invest more heavily today to ensure momentum right at the start of 2014. Expect that any marketing activities such as outbound campaigns (telemarketing, direct mail, email, PR, etc.) and inbound tactics (website, blogging, SEO, social, etc.) will take three to five months to ramp up to a level sufficient to start generating leads.

Right now, the big question to answer is "How much does NOT marketing cost me?"

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