An impressive product is half the battle, the other half is letting your prospects know how good it is — this is where you come in.
However, marketing campaigns require money, and being asked to deliver huge projects on a small budget is an invitation to failure.
But you do have to start somewhere. This post shows how a marketing budget (whatever the size) will enable you to reach your full potential — or at least make you realise you need a budget to succeed — and gives you the tools to define the right budget with our budget template.
Why Don't You Have a Budget?
When we ask manufacturing CEO's why they don't have a marketing budget, we get these four answers:
- "We don't really need a marketing budget"
- "We've just never had a marketing budget"
- "We've never had to market our business before"
- "I have no idea!"
The truth is, you've always had a budget. You've always been marketing your company, whether you've been networking, employing marketing staff, creating brochures or having your website designed; you just haven't allocated it to marketing.
Why Do You Need A Budget?
Marketing isn't just throwing expensive advertising and promotions at prospects, it's an area of business that's critical to success and deserves to be given a respectful budget. Here's why:
- The main benefit of a marketing budget is that it forces you to think about strategy and goals. You won't find many business owners that are willing to throw money at something without having an idea of what the end outcome will be!
- You won't end up throwing your marketing budget into other areas of the business that don't need it, so you aren't wasting money
- Marketing and sales are like brother and sister, typically those that don't get on! If you can create harmony between the two departments and allocate responsible budget to both, you'll see positive results
- Costs aren't always noticeable, if you pay the odd writer here and there or get your designer to create product photographs for social media, you're still marketing and it's better to allocate budget to it
Learn how to structure a marketing plan with this blog
What's Included In A Marketing Budget?
You also need to think about what your budget includes:
- Paid Advertising Budget
- Content Marketing Budget
- SEO Budget
- Video Marketing Budget
- Events Budget
- Print Budget
- Graphic Design Budget
- Software & Tools Budget
- Outsourcing Budget
- Product Marketing Budget
- Staff Budgets
- Website Budget
That's a fair bit to cover! It works out at around £200 a month per service if you have a £30,000 budget — that's without any staff costs, so it won't get you far!). You don't have to cover everything though, you can find what works for you and focus on that.
Don't Forget Your Website
It doesn't matter whether you had your website redesigned six years ago or six months ago, you can always make improvements. Some manufacturers like to bury their head in the sand and forget about their website. But there's one thing you should remember:
Your website is your biggest sales and marketing tool!
Think about it, where do people go to view your contact details, your website. Where do people read about your services, your website. Where do people get the majority of information about your company from, your website.
You'd be foolish to ignore it, so it's worth setting money aside in your marketing budget to maintain and update it. You may need to redesign your website, read this blog to find out if you need to think about a website redesign.
Where Are Manufacturers Investing Their Budget?
Most manufacturers will realise the importance of marketing to some extent, here are the areas we think are more in focus right now:
Why You Need To Consider Increasing Your Marketing Budget
In the not so distant past, marketing was described as fluffy, it's no wonder really. It was impossible to know how many people your leaflets converted or whether your brochure was a success. Digital marketing has changed this as marketers can now track everything from email clicks to page views.
In particular, inbound marketing is renowned for its low cost and ability to track effectiveness in areas critical to growth, such as lead generation and increased conversion rates.
The technology at inbound’s core means marketers can track the impact of their campaigns and demonstrate clear ROI at the touch of a report-generating button.
And having a marketing strategy in place with demonstrable ROI creates a self-fulfilling budget pot. HubSpot research shows that delivering a marketing strategy that enables you to calculate ROI means you are 1.6x more likely to receive increased budgets. And, with a sufficient pot, you can take decisions more quickly which will make your company more agile and competitive.
Note: If you do have a marketing budget, pat on the back!
Understand Your Goals Before You Do Anything
To establish your marketing budget requirements, you need to understand your business and marketing goals, and what activity you need to plan to achieve them. Without this, any marketing you do is random, and it'll be impossible to measure success.
For example, if the company's goal is to reduce delivery delay by 5% in one year and doubly reduce it to 10% in two years, you need to understand how that affects your marketing goals and budget.
Chances are, the main chunk of the budget will go to the department who need it the most to achieve the goal, but it doesn't mean other departments don't require investment to make it happen. Marketing could create a video to show the prospect how delivery delays are reduced, or use it as a unique selling point in the website copy.
Let's take a look at Mini, whose business and marketing goals are obvious when you look at their website. We don't know what Mini's exact goals and aims are, but it's clear they want to strengthen the communities in which they operate through cultural, social and economic means.
Mini's vision and goals fuse with their marketing strategy as well. The video below shows how Mini make their cars, but the factory is also a tourist attraction and received an award from the National Tourism Agency.
We don't know Mini's budget, but we're presuming they get a decent amount due to the size of the company! A good guideline is:
- 1 – 2% of your gross revenue will enable you to commit to engaging and retaining current customers with straightforward tools and strategies. Fine if you want to maintain market position.
- 3 – 4% of gross revenue means you can attract new prospects and retain current customers with advanced tools and plans. This will help you increase market share and supports moderate growth goals of 10-15% in the year.
- 5% or more of gross revenue allows you to accelerate your results by applying more resources to generate leads, conversion rates and sales. Using complex marketing strategies and cutting-edge tools you could achieve ambitious growth plans of 20% or more and increased market share in a year.
Let's say your gross revenue is £1.5 million, which at 2% is a £30,000 pound budget. At 4% it's £60,000 and at 6% it's £90,000.
However, every business is different. Some companies like Salesforce go as far as investing 53% of revenue into their marketing. And, if you are planning world domination, then you’ll likely need a much larger budget than you already have.
Think about the size of your firm as well, if your a large firm you'll be more likely to invest in bringing new products to the market or keeping current customers happy. Smaller firms will need to generate more leads to secure more business
Keep Up With Your Competitors
It's important to keep up with your competitors as they'll help define your budget. If you see they're having success with a certain type of marketing, whether it be videos or a new website, you should consider investing at a similar level.
Obviously, you need to have your own ideas and plans. You can't just follow everyone else if you want to be an innovator. But keep one eye on your competitors and one on what you're doing.
Want to learn more about manufacturing marketing? Read our Ultimate Guide!
Need Help Setting Your Marketing Budget?
Whatever your goals, it’s clear your budget needs to be suitably sized so you can deliver what you’ve promised. Running out of money halfway through the year won’t only be disappointing for you and your team, it will impact your company’s bottom line too.