January 12, 2020How much to spend on marketing every month, and what to expect Posted By : Luke Hawley/ 0 comments / Under : Marketing Fundamentals Marketing is the most important investment you will make into your business.Hello, and welcome. In this video, I wanted to talk about the monthly marketing budget in terms of what to expect. I will discuss three groups of marketing spend: less than 2,000 a month, between $2000 and $4000 a month and more than $4,000 a month.Now, let’s start with the first one less than $2,000 a month. Now for most small businesses who are spending less than $2,000 a month what you tend to be focusing on here is generating leads. So more phone calls and messages. The mindset that most businesses have is that it’s my responsibility to close the sale and more often than not, you back yourself that you can convert. So if you’re getting those phone calls, if you’re getting those emails, if you’re getting those messages, you will be able to convert them into a paying customer. So what you’re looking for from a marketing agency is to generate good quality leads. Now, what tends to happen at this price range is a focus on what I call “formulaic marketing” or arm’s length marketing. So what these agencies will provide you is a formula they use to generate leads. It’ll be standardised with some minor customisations. They’ll essentially fitting you into that formula. They may be using templates or existing content to apply that for your business. So for instance, let’s say if your partner with a marketing agency whose niche is actually in your industry. So let’s say they specialise in generating leads for accountants. Then they’ll likely have a suite of content they’ve already created using stock images and proven copy and essentially plugging in some of the gaps with your business details and then sharing that on your page. Now definitely there are examples of agencies that more generalists, they have more of a standardised approach that will use stock images or any existing content you have on your Facebook to create the ad campaign. So for under $2,000, you’re probably looking at around fifty per cent of that spend in management services. So paying for their time to execute the plan, and the other half is the ad spend; paying it to Facebook or Google.Now under $2,000, you’re probably focusing in on one maybe two tactics. It is best to double down on one execution. It’s doing well versus trying to spread yourself too thin. So you might have Google ads and SEO to win with search. You might be focusing on Facebook and Instagram in terms of generating interest for leads, but you tend to be focusing in on one of those. You might supplement some of this marketing with local area networking. You might have some really basic emails that might go out. Hopefully, you have a CRM, and that’s tracking all this. Most businesses will focus on search or social media. If you’re a tradie or service provider with high search intent, Google search or search is where you’ll get higher returns where people are actively searching for your content. That’s where you’ll get the best bang for the buck. And if you offer a service that people are less likely to search for, so tends to be more browsing, more shopping, more aspirational then that’s where Facebook and Instagram can be beneficial for you. Under $2,000, you are not getting a custom marketing strategy. You are unlikely to get detailed analytics or reporting from the marketing professional. Their time will be focused on generating leads and managing your ads. They will focus on tactics. That is why I call it “formulaic marketing” because they are plugging you into the agency’s formula for generating leads.So that’s under $2,000. Suppose you’re spending between $2000 and $4000. You may continue with formulaic marketing, but you now start to widen the net. So you have focused purely on search, and now you want to add social media or the flip side, you have focused on social media and now want to add search. Maybe you’re starting to explore direct marketing or email marketing. You are beginning to expand the tactics a little a bit. Or you may just double down on ad spend, going from $10 a day to $20 a day to $30 a day because you’ve seen the results, you see the momentum, so you’re looking to increase your investment. So that’s option one when it comes to between $2000 and $4000 is to expand on that formulaic marketing by either adding tactics or to increase your ad spend. This approach makes sense if you are a tradie, where the mindset is purely on generating leads. Also, between two and four thousand dollars, you might be now considering a strategist. So this is what I call “partnership marketing”. So this is where you’re bringing someone on who’s going to provide custom solutions for you.The mindset is not just on lead generation or sales, but it’s about building your brand. This is for those businesses that are serious about getting to seven figures, serious about scaling their business—perhaps repositioning their business to resell later. You are changing your mindset, from a focus on short-term lead generation to multi-month, multi-year business and brand building. So you want to bring someone on that has that long term vision and that can review your business holistically – a partnership in marketing. From two to four thousand dollars, you’ll likely be getting the advice, the strategy and the analysis but the actual work in delivering the marketing is with you. I recommend “partnership marketing” if you’re thinking of scaling up. If your focus is still on lead generation, then double down on the formulaic marketing.Now if you’re spending more than $4,000 a month of marketing. This is where you should expect a quality custom strategy, managed and executed by a dedicated specialist. They should provide you with a unique marketing plan. A holistic view of growing your business. A proper, long-term plan with quality tracking and analysis. They’re not just looking at social media metrics such as impressions and reach. They are assessing the cost-per-acquisition, sales revenue growth, sources of revenue growth – to make sure you’re making informed choices about your marketing. You are building upon “partnership marketing”. You are essentially hiring a marketing manager, to coordinate all your marketing, both strategy and tactics. They are utilising professional copywriters, graphic designers, and organising professional photography and video to provide good quality custom content for you and your business. You’re thinking about your branding at a whole another level. Also at this level, especially if you’re moving from $4,000 to potentially $6,000 a month. You should start to be considering not just the marketing support, but you want to get end-to-end support as well – marketing and sales. They are managing the whole funnel from lead capture, engagement, through to the conversion, and advocacy. All those steps are being reviewed, managed and executed with perfection. This is ideal for businesses already over the one-million-dollar mark and looking to scale. This may including expanding their operations in more areas, more regions or they’re just looking to improve their profitability. The benefit of getting both sales and marketing support is that it will enhance the profitability of your business. Your spend optimised and targeted to improve return on investment.So for those trying to work out, budgets and what to expect, that’s broadly the three groups for small to medium-sized businesses. Under $2,000 per month is “formulaic marketing”. Just plugging you into a formula that agencies have created, with ~50% of that going towards ad spend. Between $2000-$4000 per month, you are doubling-down on formulaic marketing, or you’re now starting to consider “partnership marketing.” To bring on a strategist for more custom planning, strategy and analysis. Above $4,000 per month, you have a dedicated marketing partner. A professional you manage both the strategy and tactics of your marketing to build your brand over the long-term. Plenty to consider when determining your marketing budget. My name is Luke Hawley, Managing Director of Marketing Broker Australia. I hope you found this video helpful. Thanks. Bye.If you would to speak to a Marketing Broker about the marketing of your business, please visit our contact us page to learn more and book your free consultation.