small business owners won’t admit it; they don’t have a marketing budget. If pressed, they don’t have any budget. Furthermore, most small business CEO’s don’t look at what their competitors spend, what’s normal in their industry or any other rationale. A new 1survey from Clutch revealed that close to two-thirds of 61 percent of small businesses didn’t have an official budget of any kind.
Small business owners wing it. It’s a haphazard approach to marketing and one that leads to a lot of wasted money.
Why Budget?
Businesses of all sizes should create a budget if they don’t want to risk the future of their companies. Without a budget, you don’t have a measuring stick against which you can judge performance. A budget gives you a clear picture – you’re able to see how your actual results varied from the budget you established. More importantly, a budget allows you to make decisions so you can turn the ship around before it’s too late.
How to Budget?
The truth is, nobody knows what to spend on marketing because every business and industry is different. Most can’t agree on what expenses to include in a marketing budget. Should the website be part of marketing or separate? How about PR and promotion? This lack of definition shouldn’t discourage you. You still need to do it.
The most common method of developing a marketing budget is to base it on a percentage of revenue. It’s usually between 3-5 percent for small businesses. But the correct allocation depends on several factors like what industry you’re in or your current capacity.
A good rule of thumb for small businesses with less than $5M in revenue is to spend 7-8 percent of revenues on marketing.
Spend Your Budget Wisely
Don’t beat yourself up over not having a budget. My advice is to accept where you’re at and work from there. Focus on improving the efficiency of your marketing and concentrate on spending your precious marketing dollars wisely. It’s easier to do if you review your marketing expenditures monthly. While I recommend a quarterly marketing plan, waiting this long to consider your budget increases the chance of spending more than you planned.
1 https://clutch.co/accounting/resources/why-small-businesses-need-budgets
Mistake #3
No Goals
The best way to improve your sales is to set 2marketing goals. When business owners implement marketing programs without defining their goals, they end up with inconsistent and ineffective results. How do you know you’re successful unless you set goals?
Having clear goals allows you to make choices:
What do I need to work on today?
Is this going to get me closer to my company’s longer-term plan?
What can I take off my to-do list?
Are there activities I can outsource so I can focus on the growth of my business?
The first step in determining your marketing goals is to pick the desired outcome. It could be how much money you want to make, revenue from your signature product, the number of new clients, etc. You’ll need to pick goals that are quantifiable and measurable. All goals should be SMART (Specific, Measurable, Action-Oriented, and Time-Bound). Here are some examples:
Run an ad for a new eBook on LinkedIn and generate 50 new prospects by the end of Q1.
Create a new lead magnet that will generate 200 subscribers to email database – Q1.
Develop and promote a webinar that results in 25 new leads and generates $5000 in revenue.
What Goals to Set
You should have quarterly goals that reflect your sales and marketing effort. The graphic image of a funnel is often used to explain how marketing and sales interact. Think of the top of the funnel as marketing. Marketing’s task is to get leads; sales have to convert those leads into closed business. Many argue about the number of stages a lead should pass through before becoming a customer. And, to complicate matters even further, marketers often use different terminology to describe these stages. Here are the basics that you need to have to set your quarterly marketing goals:
1 Target Available Market – how many total prospects are available.
2 Marketing Qualified Leads – the number of leads generated by your marketing efforts.
3 Sales Conversations – the number of offline conversations held.
4 New Customers – how many new customers purchased.
You can add more stages, but these are the basics for your Lean Marketing Plan. If you’d like a Lean Marketing Plan template, you can download one here.
2 https://kenyonblunt.com/elementor-1131/
Mistake #4
No Definition Of Your Core Customer
Pick up almost any book or article on small business marketing, and it probably starts with a description of your customer. It is so essential but widely ignored. Why? In my opinion, it’s not a matter of knowing your customer, but it’s the depth of that understanding. Customers respond to either “pain” or “gain.” How does your product or service move your customers away from pain or closer to gain? A customer description that includes these motivators is vitally important.
What Is a Core Customer?
Regardless of the type of business, you sell to customers. In the past, marketers have used the term “target customer,” but “core customer” is more appropriately descriptive. It means that you want to identify a specific customer, a real person. Your customers are unique individuals—they are more than just statistics. The more you know about your customers, the more you’ll be able to recognize their needs and cater to them.
To grow your business, you need to create and identify your core customer. 3The Inside Advantage by Bob Bloom explains that not all customers are created equal. Some will drain your resources while others require little support. The goal of defining your core customer is to get more of the latter.
Create Your Customer Persona
To go beyond a demographic description, you need to develop a profile of your core customer that describes who they are, what they do, and why they like buying your product or service. Essentially, you are creating a fictional profile based on your understanding of customers’ needs and decision-making process. It’s called a “persona,” and it’s used to help shape the copy you write and the offers you make.
How do you develop a customer persona? There are hundreds of templates out there that can help you create a persona. Here’s one that incorporates all the descriptions
