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THE IMPORTANCE OF BUDGETS WHEN PLANNING YOUR MARKETING AND HOW TO CALCULATE YOUR ROI

Two of the most important areas to consider when planning your digital marketing are budget and objectives.  With these two areas defined what becomes clear, is the path needed to achieve success.

It is important not to get hung up on the how at the initial stage, and please do not even begin to consider your budget yet.  This can lead to over analysing concerns and objections, which for the most part will come from personal fears rather than an objective overview of your business.

The holistic approach 
Take a holistic approach, because while it is not all about the money, what is important is the planning and execution of the plan you are going to be making the investment on.

Five key areas to assess before you even begin thinking about the cost:
 
1. Consider your target audience and where are they online
If you are a lawyer who targets clients over the age of 30 with a six figure income, LinkedIn may be the place for you to look at engaging in groups or sponsoring posts on your company profile.  If you are selling women’s jewellery to a target audience of 25 to 50 year olds, in major cities with an income above five figures, Facebook advertising - where you can refine relevant brands, interests and regions could be the answer. Fine tune who exactly it is you want to target and where they are online, the business without a niche is often the business seeing less growth.
 
2. Look at the data you already have from existing visitors and clients
Knowing how your clients / visitors interact with your business online - think website, Facebook, Instagram, email campaigns etc is the first step in understanding how you can convert visitors into clients and repeat business.  There are a variety of tools available, such as HotJar or Crazy Egg to monitor behaviour on a website, as well as the insights available from all social media channels.  Your email marketing campaigns can provide a wealth of data on what your clients are interested in by the clicks they take, and when they are opening your emails. This data is a goldmine for your marketing objectives.
 
3. How you can use client data to build your marketing plan
Once you have identified your target audience and analysed the data you have on hand you can begin to craft your marketing objectives.  Objectives will vary depending on the space your business is in.  A younger company may be all about focusing on building brand awareness, and older company may be looking to increase sales.  The data you have will provide a good indication of what to focus on and / or how you can improve.  A variety of initiatives may need to be looked at, so now is when the details come in to play, as you create your plan by reviewing all of your options.
 
4. The benefit of resources you already have available
You have your marketing objectives set and a plan in place, now to look at the investment needed, or in simpler terms your marketing budget. Yes, you do need to spend money to make money, but take a look at your networks for successful experts in their fields who could help you implement your plan. 

5. Be open to exploratory conversations, ensure you do your research on different options and review how they fit into your marketing budget and how they will meet your overall objectives.
An existing business, with the benefit of longevity behind it, could find the opportunity to extend existing relationships, perhaps by offering a loyalty programme.
 
I always suggest leaving looking at the budget until last, know that it is so very important and because it is left til the end does not mean to ignore it all together. As mentioned above, it is often personal limiting beliefs held around money or success, which can lead to the stifling of business growth.
 
Measuring your return on investment
Generally marketing budgets range from 5 to 12 percent of revenue, depending on your objectives, and where in the market your business current sits.  If your business is looking to grow your budget may be at the higher end of the scale.  To work out your return on investment (ROI) you can use the following simple formula:
(Return - Investment) / Investment *100  (as a percentage)

Return (Total revenue generated from the marketing plan)
Investment (cost associated with the marketing eg. print, advertising, technical, management, cost of the goods sold – ie. Time to produce the good or service)

When you have a return on investment goal you can more accurately measure how success for your marketing plans are and adjust these throughout the life of your business to ensure the greatest return for your company.
 
Remember businesses evolve over time, and data is ever changing, don’t fall in to the trap of thinking once you have a marketing objective it will always be the same.  Business growth comes from assessing and reassessing. 

To discuss your marketing plan and budget, get in touch today.



 

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