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Marketing: How Much Should I Really Be Spending?

A Helpful Guide for Allocating Your Marketing Budget

With the New Year right around the corner, it seems a fitting time to talk about marketing budgets for 2018.

As a marketing agency dedicated to the AV and automation channel, there’s one question we hear again and again. It’s not “should we do marketing?” It’s “how much should I spend on marketing?”

The bad news is that there’s no magic number that’s true for every integrator out there. The good news is that there is clear data and best practices that can help guide you toward finding the right number for your business.

Take a Look Back

The first thing to take into consideration: what is your growth goal for the year? How much of a revenue increase are you planning on making?

If you’re not sure where to start with that exercise, or what you’ve got planned yet, then it’s important to look back at your previous year’s gross income.

What business did you make last year?  Are you looking to expand upon that with a small percentage increase or a more ambitious one?

A 10-25% growth rate falls in between a conservative and a more aggressive goal.  So now it’s time to pick which one you’d like to see your company take.  Set your goal and stick with it.

Then How Much Should I Spend on Marketing?

According to the Small Business Association (SBA), for a company smaller than 5 million dollars that’s interested in growing, a 2-3% of projected gross revenue is the ideal amount to distribute to your marketing budget.  This falls in the 10% growth goal.

Want to grow more?  That equates to putting more money into marketing.  You must up your marketing budget with a higher assigned percentage.  The SBA suggests a 3-5% marketing fund, for a business that’s trying to grow more aggressively.

How to Distribute

The next step is figuring out how to spread this plan evenly throughout your year.  The best way to look at this is by using the 4 quarters of the year.  Divide your budget by 4, then distribute the funds to different parts of marketing: content, website, and event marketing, and all your printed copy.  Anything that gets your company’s name on the map is considered promotion and marketing.

Hitting Your Sales Goal

So how does this marketing budget help you reach that growth goal?  We like to break it down into three main components:

  1. Brand awareness: Those who didn’t know of your company before will now be aware of everything your business has to offer. Increasing marketing means increasing brand awareness.
  2. Lead generation: By boosting your business, marketing will help you recognize your potential customers and clients. Regardless of how your sales are looking right now, business comes and goes in cycles.  Consider what your next quarter will look like, and always be aware that it can change.
  3. Referral credibility: It will also increase the confidence of your referrals.  Those who are looking into you already, will feel better about sharing you with their friends and family.  An active marketing presence encourages them to make a decision faster and means you can charge more for your services, as you’ll appear professional and very likely to do a great job.

Free Excel Tool

Math isn’t fun. Fortunately for you, calculating your marketing budget doesn’t require you to do much of it. Use this excel budgeting template to plug in your financial information and business goals, and it will do the calculations for you.


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Questions about what the best approach is for your 2018 marketing goals? Schedule a one-on-one consultation with Ron through our website, or by phone.  We’re always ready to offer guidance on marketing plans!



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