How Should I Prioritize the Marketing Budget for My Small Business? Jessica Lunk Effective small business marketing requires a savvy mindset. It also requires having a proper hold on your priorities, including what you should be spending on marketing and where you should be spending it. A small business marketing budget tends to be limited — but that’s okay! It may even be a good thing. The less that you have to work with, the more cognizant you’re forced to be about only spending your money where it’s really going to count. That means less wasted money on marketing endeavors that make only a small impact and a greater focus on campaigns that are truly designed to convert. And that’s a good strategy for any business — small, medium, or large. To really stretch your SMB marketing budget as far as it can go though, you need to go in with a plan. Below, we’ll go over some of the most common steps related to prioritizing your market budget to help guide you through the process and, hopefully, come out with a plan that puts each dollar you have to spend to work in the best way possible. 1. Figure Out How Much Should You Really Be Spending on Marketing For most small businesses, the best way to determine their marketing budget is to consider the number as a percentage of total revenue. The average small business spends 1.08% of its yearly revenue on marketing, reports Small Business Trends, though some types of businesses — furniture stores and real estate brokerage firms, for example — spend closer to 4%. And according to Web Strategies, B2C companies tend to spend more on marketing than B2B companies. There is no hard and fast rule for how much you should be spending. Instead, look to your industry and your own finances for guidance on how much you should (and can) devote to your marketing budget. Because you’re working with a smaller pool of funding, start out by budgeting less and see if that works out for you. Then, pay attention to your results and determine whether allocating more budget to a specific channel will net more revenue. 2. Measure Your Success Where you spend your marketing dollars depends largely on what your goals are. If you’re trying to build up a web presence, for example, you’ll want to funnel more of your marketing budget to digital marketing efforts, such as website development and social media. If you’re more focused on establishing yourself in your community, you’ll want to spend more on local ads and demographic-driven email marketing. No matter where you decide to spend, measuring success is the most important piece of the exercise. If you want more leads from social media, for example, have a process for measuring how many leads you’re generating and how many of those leads buy from your business. If your goal is less concrete – brand awareness, for example – you can still measure success. For instance, is there a boost in branded searches for your business after sponsoring a big event? When you measure success, you can see where your time and budget is best spent to drive your business forward. 3. Gather the Right Tools As you measure success and decide which strategies are driving results for your business, it’s simple to prioritize spend on small business marketing tools that can help you manage your growth and achieve more results with less money, time, and effort. The exact tools that are right for your business will depend on what your major marketing priorities and where you’re seeing success. As you establish an online presence, begin driving traffic to your website, capture leads online and in person, and follow-up with new and repeat buyers, you need the right tools. Here are some categories to think about as you tackle your marketing goals: Establishing online presence: Website Social Media Driving website traffic: Google Analytics (free with basic features!) SEO software Capturing more leads online: Lead generation software Connecting with leads and customers: CRM software Email marketing tools Marketing automation Generating referrals: Affiliate marketing software To ensure that you check off all of the right boxes for your small business’s marketing needs, circle back to your big goals, decide how you will measure success, and look for the tools that will help you get where you need to go. There are a ton of options out there — both in terms of strategy and software — and they’re all worth considering as you develop your budget. Each of the steps above will be integral in helping you prioritize your small business marketing spending and get as much value as possible out of the money that you allocate. Keep a close eye on your results so that you always know when, where, and if you need to make adjustments. Over time, you’ll get a clear picture of where you can make the biggest impact and what just isn’t worth it.