What Marketing Budget Should My Business Adopt to Make Us More Competitive?
As a business owner, you may be wondering if you should adopt a marketing budget. After all, marketing can be expensive, and you may feel like you can save money by avoiding it altogether.
However, marketing is essential to making your business more competitive. By investing in marketing, you can reach new customers, increase brand awareness, and boost sales.
Why do I need a marketing budget?
A marketing budget guides your marketing activity.
In Lewis Carol’s Alice in Wonderland, there is a passage where Alice is walking along a path, and she comes to an intersection with another path. She looks up and sees the Cheshire Cat sitting beside the path. Alice says to the cat, “Would you tell me, please, which way I ought to go from here?”
The Cheshire Cat replied, “That depends a good deal on where you want to get to.” Alice replies, “I don’t much care where.” The Cheshire Cat says, “Then it doesn’t much matter which way you go.”
Much like Alice, if you don’t know where you want to go with your business, there isn’t much point in trying to create a budget or a plan.
On the other hand, if you have thought through your desire for the future of your business, then budgets, plans, and goals are essential to ensure you get there.
The optimal marketing strategy will have marketing spending that can comprise between 10% and 25% of a company’s revenue. Given the magnitude of this expense category, it is essential that you have a well-considered plan to guide your budget.
The budget allocates your valuable capital deliberately.
The lifeblood of any company is its cash flow. Failure to carefully allocate this scarce resource can result in a sub-optimal return on capital and the destruction of value for the business.
For a business to provide value to its shareholders, it must generate a return above…