Creating A Marketing Budget
Marketing your business is very important to help drive customers to your store. Remember that a business must spend money to make money, but not all forms of advertising are created equal. For example, TV commercials and radio and newspaper advertisements can be expensive and not always cost effective. The average radius a business would want to market to would be approximately 5 – 10 miles from the business location. Further than that would be pointless in most cases because most customers won’t travel more than a few miles to purchase their product or service, unless it is a specialty business. With that said, TV and radio ads are going to hit a broad audience, oftentimes outside that targeted radius, thus wasting precious marketing money. Instead, guerilla marketing tactics are very cost effective and often FREE.
I, along with other marketing experts, agree that 20% of the company’s resources should be allocated to marketing. Why so much? I ask, why so little? Obviously you don’t want to spend too much or else you won’t receive a reasonable ROI. A business should always be marketing to new and existing customers. Unless you’re the DMV, or some other business where you have zero competition, you absolutely must market your business. I have seen many companies go out of business because when times got tough the first thing to go was their marketing budget. Big mistake.
However, with free and cost-effective marketing, you can focus more funds in other areas of your business. Some businesses have mistakenly relied on one resource (i.e. a nearby university) and focused too much energy on that one thing, while ignoring a greater potential market to target. Be sure to use a variety of marketing tactics that are appropriate for the demographics of your area.
For a few gorilla marketing ideas, see my post on Guerilla Marketing.
Does your company implement guerilla marketing ideas to reduce marketing costs and increase ROI?