Open up your sales funnel by boosting your marketing budget
This might sound crazy, but I’m going to try to convince you to spend more money on marketing. I’m not joking!
Let me explain. It’s a common thing for me to speak with entrepreneurs or look at financials statements and see a situation like this:
B2B Industrial Component Inc.
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So what are we looking at here? This is a company with solid revenues that’s underspending on their marketing. Unfortunately, this situation is all too common and happening at a time when Canadian competitiveness is dropping, while new technologies are transforming how we grow successful businesses.
A very loose rule of thumb is that if you are a B2B business, you should think about a marketing budget that’s somewhere in the 2% to 5% of topline revenue. If you are a B2C business, that number should be in the 5% to 10% range. These percentages could be higher or lower depending on your line of business, size, competition, etc.
The 3 L’s
Having seen a lot of entrepreneurs use marketing as a winning play for their business, we are doing our utmost to try to convince entrepreneurs across Canada to use the 3 L’s.
- Learn—Study how to use modern tools and platforms
- Level-up—Grow your marketing budget to get the reach you want
- Leverage—Use the right channels for your customers’ attention
We want Canadian entrepreneurs to create marketing funnels and nurture qualified leads with great content and sound marketing activities. And to do that successfully, business owners have to understand the new reality of marketing in 2017.
It’s a pay-to-play world
Five years ago, you could do a bit of search engine optimization (SEO), create content to share for free on social media and you’d be set. Unfortunately, algorithms have made it much harder for businesses to only use organic search and social media followers (i.e., earned media). To attract new business online today, you’ll probably have to pay.
It doesn’t mean you shouldn’t be creating shareable, vibrant content and optimizing your website, but you have to go beyond that. How you distribute that content, in particular, has changed and increasingly depends on who your customers are as well as the size of your budget.
Marketing today is a technology activity, plain and simple. That’s where the puck is going. Those spending time and money not thinking in those terms are ever so slowly heading towards the abyss. Disruption is the new normal. Think about that.
Now, before all the traditional marketers reading this spit out their coffee, let me say that traditional marketing channels like TV ads, outdoor ads and print ads can still be relevant to a marketing strategy that’s targeting a well-defined consumer. But, I’ll also point out that I can do a lot of targeted and quantifiable ad placement with the $5,000 to $10,000 that it will cost you for that billboard next month.
Think about your spend… however much it is
Remember, beyond the high-level budget benchmarks I mentioned earlier, the focus of B2B companies is to get new qualified leads. That’s why you have an awesome sales team who can take those leads and convert the heck out of them, right?
It’s a different world for B2C companies, where marketing starts someone into your sales funnel to convert online or in-store. So you need to give customers something to remember you by.
Where do you want to spend your limited time and resources? First, you need to know as much as you can about where your customers’ attention is at any given time so you can maximize the impact of your budget. This should be at the core of your strategy. And copying exactly what you did last year plus 5% is not a strategy.
Get up to speed
If you want your marketing to be successful, and by extension to optimize the use of your budget, you need to know what works and what doesn’t. To do that, you’ll need to understand the mechanics of modern marketing and learn exactly how it works. That means knowing how Google AdWords, Facebook ads, programmatic media buys and YouTube videos work, all of it.
This being said, I am also very practical. I know that it’s not always optimal for business owners to be the doers in their business; that’s not your day job. Running a business and being awesome is your day job. But, I want you to have the skills to be a critical consumer of what your marketing team presents to you. Find great partners and employees to execute, but challenge them to provide the highest value from the budget you give them.
Keep a constant eye on your marketing budget
Budgets need to be reviewed regularly and amended according to what is and isn’t working. This is a bi-weekly or monthly activity, not an annual review. Too often, money is left on the table or wasted because we just let things run their course. But marketing today moves too quickly for that. For example, what got you traction on AdWords last month might not resonate this month.
In the same way, what worked for you marketing-wise last year might not be right this year. For your business, here’s what I’d love to see you thinking about. (Note: This is totally made up but I want to get you thinking).
B2B Industrial Component Inc.
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Start thinking deeply about how you are reaching your customers and the odds are your marketing budget will get much more traction. Once that happens, things will get much more interesting as your business grows into the kind of company you want.
What do you think? Does this feel like too much? Can you become a critical consumer of marketing data? We want you to tell us.