Is your marketing budget aligned with your sales goals?
Read time: Less Than 5 min
To get amazing results and CRUSH your sales goals, you need the right marketing budget. Marketing is essential to growing your sales, and the question I hear most is “how much money should I allocate to marketing to achieve my sales goal?”
First, let’s decide what your sales goals are for this year. There is no right or wrong goal set, you need to do what works best for you and your business. Do you want to:
1. Maintain your current sales volume – The misconception is that you don’t need to be advertising at this stage. However, every year, no matter how great your product or service is, you will lose customers and they will need to be replaced.
2. Be Competitive – To ensure your business is growing at a comfortable rate and is keeping pace with your targeted sales goals.
3. Dominate your industry – You stand out in a crowd, anytime customers think of your industry, your business name is the first to come to mind.
Here is the breakdown to see how much you should invest in marketing to meet your sales goals:
Maintain 5% of annual sales example Annual Sales $500,000 $500,000 x 5% = $25,000 marketing budget per year $2,100 marketing budget per month
Competitive 10% of annual sales example Annual Sales $500,000 $500,000 x 10% = $50,000 marketing budget per year $4,200 marketing budget per month
Dominate 15% of annual sales example Annual Sales $500,000 $500,000 x 15% = $75,000 marketing budget per year $6,250 marketing budget per month
Stagnant or declining business Add 3% to the above
Investing the right amount in your marketing to match your sales goals will allow you to generate enough leads to increase your business.
Pro Tip: You should ALWAYS have a way to track the effectiveness of your marketing. Important indicators of a successful campaign are how many leads you are getting and how many sales from those leads.
Call us today! We are here to help create an advertising budget based on your sales goals.
If you like this Marketing Minute, you’ll love next month’s tip, “Why volume is important.”