What Is the Right Marketing Budget for You? Depends on Your ROI...

Posted: Mar 23, 2016

The age old question: What should I be spending on my marketing?

We are asked this all the time. Marketing is essential to a business’ profitability and overall growth; no matter if you’re a small mom-and-pop shop or a multi million-dollar corporation. However a business, any business, should never invest more in marketing than they make from marketing - the return on investment (ROI).


Understanding the need to communicate with your customers and having a solid strategic plan can eliminate panic if a business isn’t reaching its objectives in a timely and effective manner. So what should you spend now? And how can you be effective and efficient?

Start with your revenue. Whether you’re a new business looking at projected earnings or an establish business with brand equity and recognition, all marketing should be based on the overall revenue of your business. Each industry has a general rule of thumb for what you should be spending on marketing. But the age of the company can sway this number in either direction. For instance: it would likely behoove newer companies to invest more. Typically, these businesses lack brand recognition, so the need for an emergence in the market is higher. Therefore, more marketing dollars may be needed to make that splash and introduce the audience to the new brand.

An older business with established brand equity and market share may use a little less but should never remove marketing dollars all together. Eliminating your budget when business is good will only make it that much easier for newer, more aggressive companies to gain market share early.

There are steps all businesses can take to reach their marketing goals. Reaching your audience by wisely investing your money in a solid marketing strategy now vs later is the best way to maintain market share and improve your position. What are your goals? What can you afford to spend in order to reach them? 

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