Businesses that want to stay relevant, attract new customers, and make more sales must understand and acknowledge that marketing is vital. However, there are various types of marketing strategies and methods that can be deployed by business owners, some of which include, digital and traditional marketing, including several others. Knowing where to allocate every marketing budget could seem difficult. Irrespective of your marketing strategy or Method the aim of any marketing budget or plan is to generate a positive return on investment (ROI).
So, when looking into allocating money to marketing companies or initiatives for the growth of your business there are some vital factors to put into consideration. Moreover, it is essential there is a plan that involves generating a positive return on investment. In this article, you will learn simple, yet innovative steps to create a winning marketing budget with an impressional ROI.
Building an ROI-driven Marketing Budget
Every business owner understands very well the importance and need of marketing for the success of a business. The best way to achieve the best result by allocating your limited resources is by coming up with a marketing budget that is ROI-driven. With this approach, you can finally make informed decisions that yield better results.
The foundation of any great marketing strategy or plan is goals and objectives. If you don’t understand what you want to achieve with your marketing strategy, it will be difficult to set priorities right and assign a marketing budget that will give a high return on investment (ROI).
Some AI tools also help to define goals and improve productivity. These goals and objectives can be defined in numerous ways, but it is best, to begin with making your target audience and the key performance indicators (KPIs) your top priorities.
For instance, if your aim is to improve your online sales, look into how to drive more traffic to your e-commerce website and also improve conversion rates.
Once you fully understand your goals and vision, you can then begin budget allocation for the appropriate channels. Imagine if online sales are your priorities. Have you thought about investing in digital channels, like search engine optimization (SEO or social media marketing? While you should certainly factor in the price for developing an Omnichannel marketing strategy that includes brick-and-mortar stores as well as online channels if physical products are your priorities. Taking enough time to define your goals and objectives will help you in positioning yourself to create a high converting and ROI-driven Marketing budget. Here are a few steps to help you in defining your marketing goals.
- Understand your potential customers: these are the set of people (target audience) you want to reach with your marketing efforts, so ensure you are as specific as possible.
- Identify all marketing objectives: this is the aim of all marketing campaigns, although it may vary. Endeavor to improve brand awareness, generate leads, increase sales or even drive massive traffic to your site.
- Set measurable goals: they help you towards the achievement of your objectives. So, any goal you set without having a well-defined objective is irrelevant. It will be easier to track and measure your goals towards your aim and objectives. Setting up online sales as your priority goal is a determinant of the success of your marketing efforts
- ● Create a timeline: it is important you establish a timeline for your marketing goals so that you can keep track of your progress. You would be able to make necessary adjustments where necessary.
2. Evaluate your predicted return on investment (ROI)
The primary key to investing money is to know what return on investment (ROI) to receive. An ROI is the percentage of the original investment that you expect to gain. For example, a savings account may have an ROI of 2.5% per annum, while a stock portfolio may have an ROI of 10-15%. To know what ROI to expect, divide the return you expect from the investment by the amount you invested.
For instance, if you forecasted a $100 gain from an investment worth $1000, your ROI is 10%. Although there is no assurance that the prediction is accurate, knowing your potential ROI helps you understand whether the investment is worth pursuing or not.
One way to stay ahead of your competitors is by researching your industry and competitors thoroughly. Be familiar with what is happening in the field so you can adjust your strategy accordingly. Track your competitor’s efforts, fundraising strategy, product development, and many more. Be the first to know when there is a new product or service within your industry, make major moves, or hire key personnel. Keep your competitors close, and you can certainly stay one or more steps ahead of them. In turn, it will keep your business on the cutting edge.
Any business that intends to stay relevant within the business space must appropriately maximize marketing skills. Marketing campaigns are often costly, so it is essential that you set a realistic and measurable budget for each activity. This way, you can intentionally allocate resources efficiently and effectively without overspending. Monitor your costs meticulously, so you would know what your money is being spent on.
Be realistic with the result you can achieve with every marketing budget. Rather than expecting too much, just focus on setting achievable KPIs and measuring the progress against them.
Every business owner must track their results and review strategy to ensure the marketing ROI is correct. You can do this by curating a budget that is KPIs-based. Google Analytics and some social media analytics are two basic methods to do this. From the words of Michelle Thomas, ScamTeam.pro marketing guru and blogger, “Marketers must be prepared to invest and get the right tech in place to develop its first-party data.”
To begin, research the channels that are more efficient for your business then pour into such channels till your cup is filled. Then go ahead to track your result, using your objectives which could be generating leads, web traffic, selling, and many more. So, if you are not seeing your desired result from any of the sources, you can either adjust or implement more investment towards another channel. Keeping track of your results will confirm whether your marketing budget is actually effective for your company. Basically,
- Create key metrics tracking systems. Some of these systems may include lead generation, web traffic, sales, and many more. By tracking these data points, business owners can have a better idea of which aspects of the campaign are effective and which need to be revised.
- Revise the campaign as needed based on the data collected. It is essential you revise your campaigns if they are not giving you what you want. Through continual tracking and revision, businesses can ensure that their marketing campaigns are delivering optimum results.
It is also great that you take some breaks to celebrate your progress. If you reach your KPIs or not, it is important that you acknowledge and celebrate your achievements. This will not only encourage you but will also motivate you to keep pushing forward.
Businesses that want to thrive in the competitive marketplace today must engage in effective marketing. Unfortunately, marketing budgets, most times, are either too small or non-existent. This is usually a recipe for disaster in businesses because, without a proper strategy, there will be low sales even with the best services and products.
Thankfully, an ROI-driven budget is not as difficult as we see it. With the right approach, businesses will build marketing budgets that meet their goals and provide desired results. This article clearly explains the steps; implement them and see how your business improves. Good luck!
About the Author
Michelle Thomas is a Marketing Analyst and Blogger in Scanteam. She’s been working with web analytics, data collection, and analysis for 7 years. She also works in the area of Big Data. Her experience has helped her to be a professional in marketing and related industries.