Marketing
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You likely want more customers and clients if you've got a validated product. What business doesn't?
No matter how refined your product or service is, it's up against dozens of competitors. While this is a good sign that your market or industry might be in demand, it doesn't guarantee your success. You need to build a marketing strategy that resonates with potential customers.
In this article, we will focus on the costs to consider when creating your digital marketing budget.
Strategy is never free - either you're outsourcing it to an agency or entrusting it to an in-house resource such as your marketing manager. Any time spent on building this strategy can be spent elsewhere in the business - like managing existing campaigns or improving customer messaging.
If building the strategy in house, it's crucial to consider the time you or your employees will spend developing a strategy plus the efficiency they bring to the task.
A comprehensive and long-term strategy takes time to develop, even if you're focusing on just one channel. At the same time, a poorly devised strategy might be quick to put together, but it's likely to be worse than none at all - you'll end up focusing on the wrong goals and outcomes plus losing money on campaigns that aren't producing results.
From our experience, expect to spend several thousand dollars in capital, time and intangibles on developing your new marketing strategy.
The cost of a resource varies based on the level of experience when talking about marketing. A marketing executive capable of strategy execution will cost more than $100,000 a year in salary and benefits.
After factoring in recruitment and the cost of turnover, an executive can cost more than 2x times their annual salary. Marketing staff lower on the pyramid can cost the business 30% of their yearly salary to replace.
We recommend that you outsource some of your marketing and lead generation efforts to an agency. Companies like Fide charge a fixed monthly fee for a team of experts that deliver better outcomes at a fraction of the cost.
If you're hiring internally or outsourcing your digital marketing, check that they have a proven track record. Potential hires and agencies should be able to demonstrate past success. Agencies, for example, should be able to provide relevant case studies for similar businesses.
How will you be executing your digital marketing strategy? Will you need automation software? If yes, how much will it cost you each month?
Almost all modern marketing software is cloud-based, so you'll be charged a monthly subscription fee. This subscription fee typically scales with the number of users and additional functionality you require.
For example, some software has very deep functionality and can serve as an all-in-one solution. In contrast, others specialise in certain functions like providing a CRM to manage leads to automate web chat communications with AI.
When determining how you'll select your marketing tools, do not pay for more than you need. As your business grows, you'll likely switch platforms and incur further costs. The ROI on most marketing software costs is measured in operational efficiency. At the same time, other software can directly affect your bottom line, thanks to it being more effective at generating leads.
Outside of software, you'll need to consider the other operational costs to execute your strategy, including rent, server costs, computers, furniture and more. It'll all depend on how much you expect your company to need to grow to execute your strategies.
Word of mouth and referrals are a great way to generate high-quality leads, but it's rare for a company to grow like this alone. Word of mouth and referrals aren't predictable or scalable. As a result, many businesses will find themselves heavily investing in paid promotions to build their customer base.
This can include paid advertising via Google, Facebook and LinkedIn, creating affiliate programs that pay a commission to partners and promotions. The costs can vary widely but can be typically measured in cost per lead (CPL) or cost per customer. If your customer's lifetime value (LTV) is greater than the acquisition cost, your marketing strategy is moving in the right direction. However, the larger the LTV, the more you usually need to acquire a new customer.
Starting a business isn't cheap, and scaling one may cost more than expected. However, a thorough analysis can provide value beyond simply showing you what it'll cost to scale.
With marketing projections, you'll find it easier to get budget approval and financing (e.g. investments or loans) to fund your marketing strategy and efforts. If you understand the costs and the expected ROI of these efforts, you'll be in a solid position to select (and repay) funding that'll be more than offset by your future growth.
If you're having difficulty building a marketing budget or want to know the costs involved in outsourcing certain marketing activities, get in touch with us today for a free consultation.
