One of the priority investment areas for businesses relates to marketing. Close to 57 percent of businesses are looking to increase their marketing budget as per the survey. While one-third of the budget is allocated to marketing technology acquisition, nearly 21 percent of the budget is set aside for multi-channel advertising.
For businesses that earn less than $5 million annually in sales, financial experts recommends allocating six to seven percent of the revenue.
While the ideal marketing budget depends on the business needs, competition, and nature of the business, it is not necessary to spend a fortune on advertising. A survey on advertising spends of 537 small businesses across the Nigeria found that the budget for advertising for 37 percent of small businesses spend is below $5,000.
Irrespective of the nature of your business, a keyway to save money is to get suitable business insurances. Your service based business depends on your skills and expertise, which means any error, negligence, missed deadline, or breach of contract – whether intentional or alleged – can result in costly lawsuits. An average cost of lawsuit can deplete a small business of its profits.
Ways to save marketing expenses.
A majority of expenditure for small businesses relates to social media, email marketing, content creation, website design and management and offline marketing. These alternatives help businesses to optimize their budget while saving a considerable amount of marketing dollars.
Promote referrals: Encourage your happy customers to refer your service or products to friends and family members. The effective referral programs based on small incentives have contributed to the success of companies like BOLT-Taxify and Uber.
Use free marketing tools:
Digital advertising is a key focus area for marketers and small businesses, given the advantages of targeted advertising.
A study found that 56 percent of small businesses are looking to enhance their marketing spending on social media advertising, while 41 percent are set to increase expenditure on online advertising. Many of the available online marketing software or tools charge a fee, but there are some free alternatives. For graphic desigfree infographics and graphic design tools are ideal options in place of paid tools such as InDesign and Photoshop.
For market research, you can use free online questionnaire and survey tools to analyze your target market. There are also free marketing budget templates offered by Hubspot, Score, and Smartsheet.
Partner with others:
Acquiring new customers can be an expensive process. By partnering with companies that have an extensive customer base aligned with your target audience is a great way to cut down on the cost of new customer acquisition.
While there is no one formula that fits all companies when it comes to saving money on marketing, planning the marketing budget, keeping track of marketing spend, and using metrics to measure the ROI of your investment are some ways to stay on top of your expenses.