While the adage claims you have to spend money to make money, your marketing budget needs to be set in stone (unless you have reached the revenue level from previous efforts that allows you to move the numbers upwards).
Sticking to any type of budget can be challenging, but it is critical that you stay on target with a marketing budget in order to make every dollar count for something in terms of maximizing your return on investment and increasing profit margins.
To help you stick to your marketing budget, try these steps:
1. Create a main budget made up of smaller budgets. It's important to have both the big and small picture of where you want to spend money to market your organization. You need the smaller budgets as the tracking device for the obvious and unforeseen costs attached to each tactic. These smaller budgets then provide a way to switch out a marketing strategy that no longer works for your organization. You will also be able to see how certain parts of your marketing strategy are working when you create smaller budgets within the main marketing budget. For example, since your marketing will most likely consist of paying for clicks or impressions, you will want to have a specific budget allotted for something like this that tends to eat up more of the budget than a social media campaign.
2. Assign a specific amount for each marketing campaign in advance of implementing those plans. Based on research and previous experience, you must put a price tag on each marketing plan in advance, not a ballpark figure. Use this amount as the baseline when negotiating an online ad campaign or social media campaign. When you have an exact dollar figure for each campaign, you tend to follow it more closely than if you have one large number that covers all marketing activities. It is a true budget this way because it shows you that you only have x amount to spend for each area you are working on. Since there are often hidden costs involved with certain types of marketing strategy, such as research, message testing, more elaborate marketing campaigns, and further click purchases. It helps to calculate the possibility of greater costs into each plan and prioritize which ones are essential so that other strategies can be postponed if the marketing budget appears as though it may go over budget.
3. Track results to ensure that you are spending only what you allotted to a specific campaign or marketing platform. Just because you said you would only spend x amount of dollars on a campaign does not mean you actually did. Without following spends on certain campaign platforms, you may be surprised to find that it cost a lot more than you anticipated. And, since you were already vested you felt like you had to go all-in. This is when your marketing budget gets turned upside down. However, if you track as you go and account for every cost that pops up, you can make sure there is no overspending.
4. Use your results to drop any inefficient marketing tactics. By continuing to monitor results along the way in terms of the return you are getting for each investment, you will notice patterns that tell you which ones are working and which tactics should be stopped. If you did not realize that certain marketing strategies were just costing you money and time but were not delivering on their promises, you would be wasting money and quite possibly busting your marketing budget. However, if you can quickly identify the underperforming platforms, you can remove them and save that money, maintaining your budget target.
5. Research and leverage marketing tactics that involve free or low-cost tools as well as competitively priced talent. With the migration to online marketing platforms and channels, the good news is that there is a plethora of new free or low-cost marketing products that involve everything from advertising, search, and public relations to social media and other lead generation tools. And, they work too, dispelling the belief that "you get what you pay for."
The same goes for finding marketing talent. Nowadays, there are numerous freelance marketplaces that can help you find the right talent for writing, graphic design, social media and more. They can help to keep you on budget and work on a project-by-project basis for overall higher value than the overhead of keeping an in-house marketing team. Of course, if you are a startup with a very small marketing budget, you can also do it yourself and leverage as many free marketing tools as possible.
No marketing budget is perfect, and you cannot always control external factors that cause an impact upon that budget. However, these five steps provide a framework to stay the course until it comes time to create a new marketing budget as your company grows, or specific results throughout the year offer insights into how to improve its scope and size.