So how much should you spend each year on your marketing program? Some companies take a percentage of the past year’s revenue and use that as the budget for the upcoming year. I don’t like this as it assumes that a fixed amount of money must be spent irrespective of business conditions.
Your marketing expenses will naturally be higher in your first few years of business. As you put referral programs in place and get your website traffic up, you will start bringing in new Suspects and Prospects at a higher rate and the need to spend a large chunk of your budget on marketing programs will decrease.
So, my answer to how much you should budget is this:
As little as possible to achieve your marketing goals for the year
In other words, your yearly budget should be driven by the goals you need to achieve during the year, not by some fixed percentage of last year’s revenue.
Comments on this entry are closed.