Small business owners are almost always looking for new ways to cut spending, and all too often, the marketing budget is the first to go. Trimming marketing budgets saves money in the short-term, but over time, it erodes customer loyalty, brand awareness, and market share. Instead of scaling back, these tips from Great Plan Ray can help your small business focus on cost-effective marketing that delivers ROI.
Businesses have had to rethink their marketing efforts in the era of social distancing and staying home. This has proven challenging for businesses that relied on traditional marketing methods like print ads, billboards, and face-to-face networking. However, digital marketing isn’t just effective, it’s alsocost-effective. Case in point, while TV ads start around $20 per impression, online ads come in well under $5 CPM with a more targeted audience.
When affordability is a priority, hiring a top-notch digital marketing agency to help with the following tactics pays off:
- Pay-per-click (PPC) advertising.
- Search engine optimization.
- Web design.
- Content marketing.
- Social media marketing.
- Email marketing.
Businesses on a budget should also utilize marketing strategies that only cost time, not money. These include cross-promotion, contests, livestream events, referral programs, and user-generated content.
Last but not least, don’t rule out friends and former classmates when you’re thinking about marketing. Building a solid network is important, and these individuals may be able to help you connect with new customers. Don’t be afraid to connect with old friends and business associates, not to mention the people you went to school with. Websites can help you reconnect with friends you haven’t spoken to in years — and what better time than now than to reach out!
CommonMind notes that, on average, B2B small businesses spend 7-8 percent of their revenue on marketing while B2C companies spend 9 percent or more. While these figures offer a starting point for budgeting, every business is unique. Your marketing budget may be lower or higher depending on your business’s industry, age, and goals.
Before setting a marketing budget, you need to understand the big picture of your business’s finances. This includes listing all operational costs and creating a balance sheet to calculate your current rate of return. A balance sheet provides insights into the business’s assets and liabilities, as well as what the business is worth. While a single balance sheet only provides a snapshot of a business’s financial health, subsequent balance sheets can be used to monitor ROI over time.
Creating an accurate and reliable balance sheet can help you spot the strengths and weaknesses in your business, which can guide smarter decisions about how to invest and grow in the future. If you don’t know how to create a balance sheet or if you need a more accurate and efficient way of crunching numbers, consider using an accounting program that automatically generates financial statements for you.
Your budget should include all expenses related to forming the structure of your operation (e.g., LLC, corporation, partnership, etc.). The fees associated with filing vary state to state, so be sure to check LLC fees by state to determine the amount. Also add all costs associated with actually registering as a business entity, such as paying a formation service like ZenBusiness or hiring an attorney to handle all the paperwork and requirements.
Once you understand your financial position, determine your goal acquisition cost. There are a few ways to accomplish this, but the simplest is to divide marketing costs by the number of goal conversions. Then, multiply the cost per acquisition by total goal acquisitions and add operational marketing costs to determine your total marketing budget.
Marketing may seem like something you can handle on your own, but creating an engaging campaign takes a lot of hard work. As such, many businesses utilize a marketing team to handle their campaigns. Even small businesses may utilize freelancers who can help them develop smart, engaging campaigns for a variety of different platforms, including social media. So determine whether you want to utilize contractors or hire part- or full-time employees for this task, and then set to work building a team that will help you efficiently and effectively execute your marketing campaigns.
You should also consider investing in content marketing, perhaps with an organization like Cornerstone Content. More specifically, content marketing is a form of online marketing designed less to advertise a specific product than to generate overall interest in the general subject or service, and that can be invaluable when it comes to building your customer base.
Of course, if you’re new to the world of hiring employees and contractors, then you’ll need to handle payroll to ensure you’re paying the people who work for you. Fortunately, you can outsource this to payroll services that will handle everything from direct deposits to time tracking. Additionally, these services can help you automate the entire payroll process, as well as help you file and pay taxes to ensure you avoid any penalties.
When you have a limited budget to spend, you want to be certain your efforts pay off. However, marketing ROI is difficult to measure. How do you link hard numbers to blogs, videos, emails, and other marketing strategies that don’t directly translate to sales?
IMPACT points out that many marketers focus on key performance indicators like web traffic, engagement, and brand awareness to measure marketing ROI. These returns are valuable, but they don’t necessarily convert to profits — which is what we’re really after.
The truth is, many marketers are measuring ROI too quickly. As a result, they fail to capture the true impact of each advertising dollar spent. Accurately measuring ROI requires tracking metrics over the length of the entire sales cycle, not just the first 30 or 60 days. Only by taking the long view can marketers accurately capture hard numbers like closed deals, cost per customer acquisition, and return on ad spend.
This approach requires patience — a tall order in a time when small business owners need revenue and need it fast. However, it’s clear that the shift to digital marketing isn’t a short-term trend, and your marketing strategy shouldn’t be short-sighted either.
Small business owners obviously have to watch their budgets, but marketing is one of those areas that’s absolutely critical to any business. So try out the strategies above to take your advertising game to the next level and you’ll be amazed at the results!