One of the easiest ways to make sure your startup fails is to not allow enough for your marketing budget. Often, companies will decide to throw everything into developing a great product. But it fails to allocate funds for the marketing budget and quickly ends in failure.
A great product can’t help people if no one knows about it.
Here is our quick guide to creating a marketing budget for your startup.
Set the Budget
The first part of creating a budget is deciding how much money you want to allocate towards marketing. What they typically don’t tell you is that you actually need a bigger budget initially compared to later in the companies life.
This is because no one knows about your product other than through word of mouth from you. Take your budget and use around 15 percent of it towards marketing. This can be scaled back later once you have a decent-sized following.
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Don’t Blow It on Pointless Marketing
Startups will then take this marketing budget percentage and blow it on pointless advertising that produces no results. Advertising is not as expensive as it seems when you know your target customer.
Sponsored social media posts and ads are one of the cheapest and fastest ways to grow your brand awareness. They are often paid per click advertising, meaning you only pay when someone converts to traffic towards your brand.
Don’t Be Stagnant, Let Your Plan Evolve
If you notice one method of advertising is not working, don’t be afraid to switch it up. Staying stagnant in your marketing budget plan can quickly lead to diminishing returns.
If you developed a new piece of tech and notice that your ad on Facebook is only showing towards older adults, it might be time to go to Youtube where there is traditionally a younger audience.
Keep Your ROI In Mind
Your return on investment is one of the most important numbers to look at when it comes to setting up your marketing budget. Say, for instance, you notice that an ad is producing a lot of clicks to your website and is not producing conversions. You should look into switching up the campaign and understanding why this is happening.
This can be a matter of switching up the ad to be more appealing or could even be a backend issue where the website is not appealing enough. One of the most underestimated forms of advertising is the user experience on a website. This can make or break a conversion.
Your Marketing Budget Can Make or Break Your Company
The marketing budget is a key component of any budget. Don’t skip out on it just because you think word of mouth can lead to the results you desire. It is always better to be safe rather than sorry.
If you enjoyed the article and want to learn more about finance, be sure to check out the rest of our articles on our blog. If you know a startup that is struggling with their marketing budget plan, be sure to send this article to them.