So, how much should we spend on marketing? Well, I am going to rephrase that immediately. So, how much should we invest in marketing? Successful businesses see marketing as an investment in their future rather than simply a cost to be borne.
I have heard that most small to medium size businesses invest 7 to 10% of their sales turnover in marketing.
However, a percentage of sales turnover is no way to decide how much to invest in marketing. No more than an arbitrary percentage mark up is any way to decide your prices. Of course, it rarely turns out to be a static figure because marketing expenditure should change as your business challenges change.
If you want to launch a new product then you have to invest more in marketing to realize your initial objectives. If the horizon looks a bit rocky then investment now may smooth the way in the future.
Marketing should be a variable but consistent investment. It is not cost effective to turn marketing on and off. You lose the benefits too quickly and regaining lost ground isn’t money well spent.
Set annual objectives – market specific or business general and invest in marketing to fulfil those objectives. Your marketing budget should be an amount that you can afford. You should make marketing an affordable part of your business because done properly it will reap rewards.