I think you’ll agree with me when I say that one of the hardest parts of running a business is knowing how much of your budget you should allocate to marketing.
But don’t worry! You’re not alone.
Many companies don’t realize the importance of marketing, and as a result, limit their revenue growth by allocating less to marketing than they should.
In fact, according to a CMO survey, marketing is responsible for leading revenue growth at 38.4% of companies. With businesses like Google investing 12.3% of their revenue in marketing and getting 20.4% revenue growth year-on-year in return, there’s no questioning the value that marketing brings in delivering steady business growth and fantastic return on investment.
In this blog, we’ll share our valuable insight into how much your business should allocate to marketing, as well as Luminate’s five essential marketing techniques that can help you get the business results that you deserve.
Some Quick Context…
Marketing budgets tend to vary industry by industry. However, on average, businesses across all industries will spend 11.4% of their budget on marketing.
Rounding that up, a good benchmark then is to allocate at least 12% of your overall budget to marketing.
Determining what channels you should then spend your marketing budget on lies in looking at the shift from traditional marketing channels to digital marketing channels.
According to a CMO survey, investments in traditional advertising such as print, radio and television have dropped consistently by single digit percentages every year for over half a decade. In contrast, investments in digital marketing such as social media and search engine optimisation have consistently grow by double digits.
In actual fact, the average firm is expected to allocate 41% of their marketing budget to online channels in 2018, and this rate will grow to 45% by 2020.
So why the shift?
Well, this comes down to looking at the differences between outbound and inbound marketing.
Outbound is another way of referring to traditional marketing channels, and is also known as ‘push’ marketing, as firms will ‘push’ their promotional message onto consumers, interrupting their daily lives. Inbound marketing refers to the new, digital way of marketing. Instead of pushing an often unwanted message onto consumers, businesses will attract visitors to their site through creating valuable content and nurturing them into becoming customers when they’re ready.
Inbound Marketing: pulling prospects in with a magnet, not beating them over the head with a sledgehammer. http://t.co/SU7XmT7G— HubSpot (@HubSpot) October 17, 2012
In this online age where consumers have a limitless range of business options to choose from, they now have the power to decide who to buy from and who to ignore. Inbound marketing takes advantage of this by providing the solutions to problems that consumers need solving, creating a mutually beneficial relationship in which businesses provide valuable content for visitors who are then more likely to be converted to customers.
Inbound marketing is much more cost effective than outbound, and better at providing higher quality leads along with ROI. According to HubSpot’s State of Inbound report, 46% of marketers reported that inbound marketing had a higher ROI, whereas only 12% reported that outbound did.
So which online channels should you allocate your marketing budget to in order to maximise return on investment?
Here are Luminate’s five essential marketing techniques that all businesses should use for maximum revenue growth and ROI:
If you write excellent content that benefits the everyday consumer, then they will come to your site.
Creating content is one of the backbones of inbound marketing, and for good reason too. Everyone has problems that they need solutions to, and providing these solutions through a regularly updated blog will be invaluable to both your company and the visitors who benefit from this content.
Publishing high quality content brings visitors to your site. You can then convert these visitors into leads by inputting several ‘calls to action’ across all your pages, such as pop up boxes for subscribing to a newsletter, or forms that request personal details in exchange for unlocking more content.
Once you receive your visitors’ information, you can convert them into customers using lead nurturing tactics such as promotional offers in personalised emails. Leads are much more likely to convert to customers through inbound than outbound because of the relationship you’ve created with them, which in turn increases your sales and maximises your revenue.
Additionally, according to HubSpot, companies that prioritise blogging are 13 times more likely to increase their ROI year-on-year.
So, if blogging isn’t already in your marketing strategy, then you should definitely get on it!
2. Automated Email
Automated emails are used to help nurture leads into customers.
When a visitor provides you with their email address, they should be sent an automatic thank you email that offers them more useful information that could lead to more content or sales offers. These emails are designed to engage your leads as quickly as possible, so that you can start the lead nurturing process the moment you obtain their information and eventually convert them into customers.
There are several benefits to utilising automated emails. Firstly, they are very cost effective, as automation ensures that you save your employees the hassle of sending emails themselves or cold calling to follow up on a lead.
Automated emails are also often personalised with the lead’s name and other information such as their location and the company they work for. This is extremely beneficial as it gives your interaction with your lead a personal touch, which increases the likelihood that they’ll buy from your business.
Automated emails also increase brand awareness, as your lead will have a greater awareness of your business in their inbox. When you do eventually contact them and try to convert them into a customer, they’ll know exactly who you are, what you do and how they can benefit from using your business.
3. Social Media
Social media is an incredibly powerful tool that all businesses should use.
22% of the world’s population uses Facebook, 81% of millennials check Twitter at least once a day and Linkedin has more than 530 million user profiles. Using a large range of social media platforms ensures that your business does not miss out on a potential customer base of millions.
Firstly, social media is useful for regularly promoting your blog content, which can drive more traffic to your website. You can also make use of paid social media adverts that are targeted at your ideal consumer by your social media platform. Showing adverts to selective audiences increases the likelihood of them coming and buying from your business. This is in contrast to outbound marketing techniques, where adverts are shown to audiences regardless of their demographics or potential engagement level.
Social media can also increase word of mouth between consumers, as they’re more likely to share positive experiences with your business on their social media, giving you free exposure to their family and friends, and enhancing your brand image.
A key advantage of inbound marketing is the fact that it is all digital, which means that everything can be measured and analysed.
Luminate uses tools such as Google Analytics and SEMrush to look at key metrics such as which pages visitors spend more time on, which channels they’ve found your site through, the percentage of those who gave you their desired information on certain pages and so much more.
Looking at these metrics allows you to analyse consumer buying habits so that you can understand your customer better, and as a result market to them in a more effective way.
Looking at which pages your visitors spend more time on allows you to see what content is more useful to them, and create more blogs on more popular topics while discarding more unpopular ones. Seeing which channels your consumers have found your site through allows you to see whether you should spend more time optimising your posts for search engines or updating your social media so that you can maximise the number of visitors coming to your website.
The better you know your audience, the better you can market to them, and the more revenue your business will ultimately benefit from.
5. Growth-Driven Design (GDD)
Growth-Driven Design takes a measured approach to designing websites by identifying, prioritising and continually improving the most important parts of your site for your consumer.
GDD has two phases: the strategy and launch pad phase, and the iterative development and continuous improvement phase.
The first phase focuses on identifying your business strategy and creating buyer personas, which refer to your ideal customer, to identify who you’re marketing to and what they care about.
The second phase focuses on your end-users, and is used to see how all your site updates impact your visitor, and how to optimise your site accordingly to provide them with the best user experience possible.
Using GDD ensures that you put the user at the heart of everything you do. Optimising your site according to their needs means that they’re more likely to buy from your business, increasing your revenue and your consumer satisfaction.
Using our essential inbound marketing techniques boosts your return on investment and maximises your profits. But keeping track and implementing these methods can be a struggle for even the biggest businesses. To be more cost effective, you may want to consider outsourcing your marketing efforts to a business like Luminate.
To learn more about outsourcing your marketing efforts, book a free Marketing Assessment with one of our team today.