August 17

How to Prioritize Your Small Business Marketing Budget


Small businesses have to make decisions about a wide variety of marketing choices (tactics), such as social media, direct mail, billboards, online advertising, print advertising, and search engine optimization just to name a few.  It can be pretty difficult to know which are right for your business.

There are a lot of factors that go in to determining what the best marketing investments are, such as:

  • Who is your ideal customer?
  • What is a customer’s total lifetime value?
  • Are they online and if so where do they spend time online?
  • What type of business do you have (Industry)?
  • What is your business type – Business to Business, Business to Consumer, both?
  • What geographic area are your customers in?
  • What is your unique value proposition?
  • What are your competitors doing?
  • What marketing assets do you have?
  • Why are your best customers your customers (in their words)
  • How will you measure results? What will you measure?

and so forth.

If you don’t really have a strong answer for the bullet points above, then you should probably prioritize developing a marketing strategy as the top marketing budget priority for your business.

I get it, no one wants to spend time and money on strategy… we feel like we need to be immediately getting customers.  But here are two big issues with that line of thinking.

  1. Getting certain customers actually costs you profit
  2. We only have so much money we can invest in marketing.

Getting certain customers actually costs you profit.

I’m not talking about the cost of acquiring a customer here – I’m talking about servicing a customer.  Not all customers are equal, and not all customers are good for our business.  Why would you spend marketing dollars to get a customer that is not profitable, or marginally profitable at the expense of getting a customer that is?  When you don’t think about marketing strategy, you are spending money getting customers that are not good for your business.

We only have so much money we can invest in marketing.

So why spend money on an advertising strategy to gets your business less than ideal customers?  Make your small business marketing budget be more effective by focusing on the right customers.  It’s pretty important to understand who your idea customers are.  By focusing on the right customers, you can dramatically develop better targeting for your marketing dollars.  You might also eliminate certain strategies that won’t help you reach your ideal customers.  Targeting lets small businesses use the marketing budget more effectively.

Marketing without strategy invites chaos.

Use Marketing Strategy to Prioritize a Small Business Marketing Budget

The answers to the bullet points above will help you develop a marketing strategy.  Having a marketing strategy drives everything else in regard to your marketing budget, or at least it should.  It will help you determine the right tactics and campaigns to reach your ideal customers, and to develop a marketing budget for your small business with the priorities that can accomplish that.

Only after strategy can you effectively evaluate the utility and potential benefits of tactics such as social media, direct mail, search engine optimization, advertising channels, and other tactics for your business.  Then you can prioritize what to include in the mix of your small business marketing budget.


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