Clients often ask us, “What should I spend on branding and marketing?” It’s a common question partly because different agencies charge wildly different fees for what appear to be similar services. However, the key is understanding your specific needs and tailoring your budget to match.
While determining a marketing budget, abide by the principle, “You reap what you sow.” If you reduce your budget to the bare minimum, you can expect the same outcome in your sales.
Consider these three things when determining a marketing budget:
- Success Metrics: Successful businesses typically have marketing budgets equal to 5% to 25% of their past or target revenue, depending on their goals.
- Market Positioning: Maintaining your current market position typically requires a “marketing spend” of 5% to 10% of revenue.
- Market Expansion: Gaining market share generally takes 15% to 25% of revenue.
When it comes to setting a clear budget for branding, there’s a bit more nuance. Understanding the following will significantly help your business as you begin searching for the right agency:
- Varied Budget Landscape: Branding budgets can vary widely depending on your goals. Whether you aim for a subtle brand refresh or a comprehensive repositioning, understand your budget should shift depending on goals.
- Strategic Alignment: Align your business's branding goals with the desired market impact. This will help you to decide on the right budget for your branding.
- Informed Decisions: Request a quote from multiple agencies to ensure your branding goals and budget align. By exploring quotes, you gain insights into the competitive landscape, enabling informed decisions.
The best way to budget for marketing or branding projects is to request a quote. A quote doesn’t obligate you to work with an agency, nor obligate you to proceed. Instead, it empowers you with valuable insights about what it really takes to accomplish your current goals for both marketing and branding. It acts as an educational tool to enable strategic decisions to propel your business forward.
In the dynamic world of marketing and branding, wise investment decisions are crucial. By applying these principles, you can craft a budget that not only fulfills your needs but propels your brand toward becoming the market hero. The question then evolves from "What should I spend?" to "What should I invest for maximum returns?" - adopting a mindset that leads to long-term success in marketing and branding.