How to maximise your marketing budget as a small to medium sized business
Uncertainty has defined the past 14 months and to survive the turmoil of the pandemic, most businesses have had to make reluctant budget cuts in some shape or form. Typically, marketing budgets are the first to be cut by those at the top, but if the 2008 economic downturn taught us anything, it is to never stop promoting your business, even when your resources are low.
Whatever the crisis, eventually people get new jobs, disposable incomes increase and consumers start consuming again – it’s how you interact with these people in the meantime that matters. Brands that stayed on message – even when times were tough – had a huge advantage over competitors that had been waiting on the sidelines for conditions to improve.
So, if you’re a small to medium sized business, whose had to make wider budget cuts but you know the wise decision is still to not halt the promotion of your business completely, this article is for you. Our top five tips to maximise your smaller marketing budget:
Carefully calculate a budget
For every business, marketing is essential for growth, yet many small businesses don’t allocate enough money to marketing, or arguably worse, they spend their marketing budget without a clear plan. A solid marketing budget is a must – £0 can’t be stretched, but a small budget can.
To allocate a budget, the first step is to match what you’ll be spending to your revenue. Many businesses allocate a percentage of actual or projected gross revenues to marketing, usually between 3–5% for small businesses. However, it’s good to bear in mind that allocation depends on several factors, including your industry sector, your business capacity, the amount of growth you can reasonably handle, and how quickly you need to make an impact. During the brand-building phase, businesses may look to spend up to 20% on marketing in order to build awareness in the market which can slowly decrease as they establish themselves.
So, now that you have allocated a percentage of money to marketing, the next step is to create a spreadsheet listing your channels of focus. To do this you will need to have a strong background understanding of your customers and which channels will lead to optimum returns on investment. A good start is the below:
Knowing how much you have to spend on marketing is crucial, but even more critical is knowing exactly how to spend your marketing budget. From the list above, you can identify which marketing resources you want to invest in more – whether that be free platforms like MailChimp, or advertising on digital platforms, such as Facebook and Google AdWords.
The best marketing budget won’t end there either. It will be continually revised against your wider business plan and commercial objectives (read till the end to hear us expand on this!)
Pick one social channel and do it well
New figures show an average of 142 minutes is spent on social media everyday and 71% of consumers who have had a good social media experience with a brand are likely to recommend it to others. On top of this, almost 90% of marketers say their social marketing efforts have increased exposure for their business and 75% say they’ve increased traffic – so if you’re neglecting your social, you’re missing a big business opportunity.
But how does an insanely busy small business owner find the time to manage five social media profiles? Realistically, on a stretched budget, you won’t be able to get the results you want on social media if you try to be good at all of them so our advice is to pick one or two and do it well. Concentrating your resources on a specific social channel will enable you to make a real impact and drive great engagement in a more streamlined fashion.
When it comes to selecting a channel, that will depend on your business, but as a general rule, most B2C businesses will choose Facebook and Instagram, while the majority of B2B businesses will opt for Twitter or LinkedIn. It’s likely you’ve heard of Clubhouse and TikTok too, but remember you can’t do them all, it’s better to start exploring these platforms once you’ve mastered the basics. You can also find more information about this on our social media management page.
Pay to play on social
An organic social strategy is essential to start building your online presence, but long gone are the days where organic is enough purely on it’s own. Today, consumers see a monumental 5,000 ads every day so, to give your business the best start on social, you’ll need to sponsor a selection of your posts to drive optimal reach and engagement.
Social media platforms now have a whole host of targeting tools which you can use from as little as £50 a post, so make sure you dedicate a certain amount of your budget towards a paid social. Perhaps there’s a big product launch on the horizon or a new project you’ve been working on – these would be ideal to put a little paid behind.
LinkedIn is one of the leading platforms here, with several new features that let you target users with content based on job title, job function, industry and user interest. Most recently, they’ve simplified audience targeting by introducing objective-based advertising (a complete reconfiguration of its Campaign Manager tool) and they also let you select different payment options like pay-per-click, per impression or per message. Setting an ad spend budget also gives greater control over your spending. Dynamics Ads are also a new feature worth exploring which you can find out more about on our latest ‘What you need to know about marketing on LinkedIn’ blog.
Invest in email marketing
According to Hubspot’s latest data, roughly 80% of marketers have reported an increase in email engagement over the past 12 months and 53% say email has been the most effective channel for early-stage lead generation. So, if you’re a small business starting out, email marketing is one of the most cost-effective methods to build credibility amongst your customers.
Not only does email marketing provide a regular touchpoint to reach out to your existing customers, but it also enables you to grow your customer base, build your reputation, and best of all, managing a campaign is more straightforward than most people think. You can share business milestones, expert content and build trust and familiarity with your audience – a huge plus when your name isn’t as recognisable as your competitors in the space.
Plus, Mailchimp’s free plan includes up to 2,000 contacts and 10,000 sends per month, so it sits well within a smaller budget too.
Trial and test
Once you’ve put together a clear marketing strategy and budget, the final step is to put in place a process of testing. As discussed in the first section, the best marketing budgets will continually be updated and revised, whether that be dedicating more resources to run a reactive campaign or to grow one area of the marketing mix which is performing exceptionally well.
Key to this is keeping a close eye on performance and there’s some great analytics tools out there to assist this. As a small business, you’re in a great position to test new areas and channels and examine the results, then you can change direction based on these outcomes. Knowing whether your strategy is helping you achieve your marketing and commercial goals is more important than sticking to a fixed budget.
For example, in the last 5 years, social media has grown exponentially with businesses spending less than 10% of their marketing budgets on social media in 2017, but planning to spend nearly 20% by 2021. If your marketing budget didn’t respond to this change, it’s likely you’d fall behind. The key is to constantly monitor your marketing efforts – ask yourself if the platform is generating the ROI you need, and then amend your budget accordingly.
There we have it. Our top tips for maximising your smaller marketing budget. No matter where you are on your business journey, marketing is essential to your growth so don’t see a small budget as an obstacle – you simply have to be a bit more savvy about where to spend it!
Plus, if you want some expert advice on where to start, we offer free 30 minute consultation sessions with our senior marketers.