How Much You Should Invest in Online Marketing
Today let’s just dive in to talking about money and your business and investing in online marketing.
Something business owners wrestle with all the time, whether you’re a home services contractor, or in real estate, an attorney, or whatever your field—you’re always trying to figure out how much you should be investing in marketing. This is an important topic because if you’re not investing in marketing you’re not going to continue to grow your sales and business. Word of mouth is great, but it can only get you so far. The businesses who are doing the most in revenue are typically the ones investing in marketing.
1. Set your overall marketing budget.
The first thing you need to look at is the breakdown of the overall marketing pie that you’re dealing with. What percentage of revenue are you putting toward marketing? There are different schools of thought on how to do this. I know some people say that 10% of revenue should go to marketing no matter what. Some people say 5%, some say 8%. That’s up to you. You have to look at your accounting to see what looks good for your particular business.
2. Break down your budget into types of marketing.
Once you’ve figured out how much you’re putting toward marketing overall, you have to break that amount down into what you are spending on each type of marketing. Are you putting out door hangers? Are you going to your local Chamber of Commerce? Are you investing in online marketing? Are you doing direct mail campaigns? How much are you spending on each thing? Where does your marketing budget go?
And now I’m going to ask you, how much of your marketing budget is going to online marketing?
It’s important to use several different types of marketing in your overall strategy. That said, when it comes to your overall marketing pie, I believe the majority of your money should go into the online marketing piece of the pie.
Why? Because online marketing is where the attention is. The attention is not in mailboxes. The attention is not in magazines. The attention is not in the door hangers. When I come home from work, I pull a door hanger off and throw it in the trash like most homeowners.
Your customer’s attention is in the palm of their hand. They’re scrolling through Facebook. They’re reading their emails. If I own a company, I want to get in front of where the attention is.
3. Shift your budget around to be able to afford what works.
Often when people think they can’t afford online marketing, all it takes is shifting some of the marketing dollars around.
There are a lot of business owners out there, and a lot of contractors, who don’t think they can afford online marketing: blogging, email marketing, Facebook ads, SEO (search engine optimization), etc. One way you can afford online marketing is to take a hard look on which parts of your marketing are working for you, and when you find places you’re not getting a good rate of return, shift those funds into the online piece of your marketing pie.
I’m not saying you shouldn’t invest in other types of marketing. It’s important to have a diverse marketing strategy. But I am saying that you should take a look at your marketing budget and shift things around so that the greatest percentage of your budget is in online marketing because that’s where the eyeballs are.
If you’re paying for things that are not driving dollars back to you, reallocate some of those dollars. If you’re buying ads on someone else’s website, such as banner ads, you can shift that into online marketing.
If you’re paying for things that are driving dollars back to you, by all means, keep paying for those things. Just like a financial portfolio, that your marketing portfolio should be diverse. When you do online marketing you should still be sending someone to the local Chamber. You should still be sending out some direct mail. You should still be wrapping your truck and investing in that. AND you should be putting money into online marketing.
4. Online marketing is surprisingly affordable.
Online marketing is very affordable. Some companies see fantastic results with as little as $1500 a month. Some companies are spending more, up into the $3,000-$5,000 a month range. But you can really do some significant things in your marketing for about $1500-2500 a month! You also have to consider how much money you’re getting in return for your investment. The great thing about online marketing is that it’s easier to track where your leads actually coming from than just relying on a customer to answer the question, “how did you hear about us?”.
5. Decide who will do your marketing.
Once you’ve decided how much to allocate to online marketing, next you need to consider whether you’re going to allocate that part of the budget to someone in house to do all this for you and pay them a salary, or whether you’re going to outsource the work to a marketing company (someone like me).
It may seem cheaper up front to pay someone in-house. However, a dedicated marketing company is going to be there for the long haul, consistently. When your marketing employee, or intern, finds a new job, your marketing could suffer until you hire a new person. Some companies have a jack of all trades employees who do the marketing between managing the phones and doing other tasks (or this could be you). You have to think about whether you’ll get the kind of results that will bring you more business that way, or whether it’s better to invest in professional outsourcing to get the job done. Either way, that’s up to you and how you want to run things.
I hope this helps you see how you can free up some money to put into online marketing, especially if it’s something you thought you could not afford.
If you know a business owner who is really struggling with affording online marketing services, please share this with them! Thank you!