Why Should You Allocate Budget to Marketing?

Marketing is absolutely essential for any business, large or small. Even if it weren’t the case originally, we now live in an age which is so saturated by marketing that it’s become increasingly difficult for individual companies to stand out. But marketing, whilst often maligned in the media and by consumers, acts as the mouthpiece of a company. In fact, the best marketing is so subtle that consumers don’t even notice it at all.

Budget your marketing campaign

Investing for Success

Some marketing will inevitably happen of its own accord. Perhaps the best known example of this is word-of-mouth, which is both organic and free. Customers are more vocal than they ever have been before, and they have more platforms on which to voice their opinions. If you provide good products and/or services, your customers will more than likely discuss this with their friends.

However, word-of-mouth marketing cannot be relied upon as your sole marketing strategy. As with most things, you will need to invest in your marketing if you wish it to be successful. And again, with most things, this investment will most likely need to have a financial aspect.

How Much of Your Budget Should You Invest?

The amount of money you are able to invest in your marketing strategy will invariably be dependent upon the size of your company’s assets. A self-employed individual running a small catering company will have less resources than, say, a multinational car company. But you should also make sure that you are allocating enough of a budget to meet your requirements. Start-ups often have to invest more substantially in marketing than an established company, simply to make people aware of their existence. There’s no hard and fast rule to how much of your budget you should invest, but a good rule of thumb is to incorporate your marketing budget into an annual financial plan so you can be sure you’re not reaching beyond your means.

Retaining Valued Customers

Perhaps the best reason for investing in marketing is for what’s known as customer retention. It’s actually much most cost-effective to keep existing customers than it is to find new ones, so you should take this into account when planning your marketing strategy. Remember, your existing customers are just as likely – if not more so – to encounter your marketing as are people who’ve never engaged with your company before. You may even wish to proportion a part of your marketing budget to Phorest‘s retention marketing software, which can help you to gauge the effectiveness of your campaigns.

Allocating Your Budget Wisely

Assuming that it’s a given that at least some of your budget should be spent on marketing, it’s important to know how to allocate this allowance properly. There are many different avenues that you can go down to increase the effectiveness of your marketing strategy, and each one should be chosen with care. For example, if you know you are likely to find potential customers online, it would be sensible to consider investing some of your pot in improving your website or improving your reach on social media. Here, just as with improving existing customer retention, you will find that analysis and careful planning will prove invaluable.