Four States Small Business Blog

How to Allocate a Marketing Budget

Posted by Pam Larimore on June 14, 2022 at 7:00 AM

How to Allocate a Marketing Budget

What should I spend my company's marketing budget on? Many small business owners are familiar with this question. Each year, more options to promote our businesses become available to us. And, of course, each new marketing tool claims to be a revolutionary new thing that will grow your business. That's all fine and good. But the fact is, no company has an unlimited marketing budget. You've got to figure out where to invest based on the probable return on investment. Let's look at some practical ways to allocate a marketing budget.

Know Your Target Audience

Large firms spend lots of money researching their target audience. As a  small business owner, you're faced with the same task but likely with fewer resources. The good news is that you can gain much of the same information by getting to know your current customers. Start conversations with your customers when you have the chance and learn as much as you can about them. Offering surveys can be helpful for this process, too. 

Getting to know your customers will help you identify their common traits, and, with this information, you will be able to recognize your target audiences better. It helps to go beyond basic attributes like age cohort and gender without violating your customers' senses of privacy. The more details, the better.   

But it's equally important to learn what your customers think about your business. Why did they choose you over your competitors? Are there areas of your business that could be improved? This information will help you perfect your marketing messages.

Choose Marketing Channels Based on Your Target Audience

Marketing channels include any method of distributing your marketing messages, such as radio, digital banner ads, billboards, or dozens of other alternatives. Once you understand your target audience, you can find marketing channels most likely to reach your target audience.

At Zimmer Marketing, we recommend choosing a marketing channel you can afford to dominate. That means your ads must be seen or heard frequently enough that everyone reached by that marketing channel will be familiar with your business and brand. For instance, the BrandsFormation system that we use here at Zimmer Marketing recommends a 21/52 plan for radio ads. For your brand to permanently stick in the minds of a radio station's listeners, your ads must run approximately 21 times a week for a whole year.

Once you've selected a marketing channel, make sure you've maxed out that medium before venturing into the one offering the next best ROI. The 'shotgun approach' to marketing is a recipe for wasting your marketing budget. Diverting funds to multiple marketing channels before maxing one out is something you should avoid. 

Plan Your Marketing for the Future

Flash sales are what they sound like; they are gone in a flash. When creating a marketing plan, you should avoid overused tropes like advertising the 'lowest prices in town.' Instead, you should brand your business based on unique attributes that distinguish you from your competition. Building your message around things that make your business special may not get everyone through the door tomorrow morning. But a year from now, your company will be benefiting from sustained growth that doesn't dissipate as soon as the most recent sale ends.

Avoid Untested Marketing Channels

Our final point about marketing budget allocation concerns untested marketing channels. The boom in digital marketing offers lots of opportunities, and at Zimmer Marketing, we want to help businesses benefit from it. On the other hand, new and untested marketing channels often make claims that they can't back up. It's best to avoid putting your marketing budget into something like a new social media platform that may or may not offer decent marketing ROI. The core of your budget should always be used for dominating a proven marketing channel before branching into more experimental options.

Are you ready to build a marketing plan to grow your business? Get started today with Zimmer Marketing! 

 

 

Topics: Marketing ROI, Branding

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We’ve created this online space to provide the latest marketing trends, news, and best practices to small business owners and marketing professionals in Joplin, Missouri, and the surrounding Four States Area.

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