Marketing holds a lot of unknowns; in a family full of small business owners, I know the stress of uncertainty and the fear of wasted dollars.
When it comes to marketing, and by marketing I’m talking everything from branding to advertising, it’s difficult to know what to spend – and it’s easy to go overboard.
If tech companies are anything to go by, according to the Market Measures Survey, conducted by tech marketers Concentrate, it would suggest spending an average of 39 percent of your turnover on marketing, as is the average spend for tech companies in New Zealand.
Of that 39 percent, the survey cites that nearly half is spent on websites and industry events. As the technology sector is New Zealand’s third largest industry, you would think those stats would be a safe bet.
However, upon further research it seems the general rule of thumb around budgeting for marketing is that companies spend anywhere between five and 12 percent of their annual turnover. The CMO Survey backs this up, showing that of the 214 respondents, the average marketing spend was 7.8 percent of their revenue.
For start ups, or those who are still in the process of developing their brand, that percentage may be a lot higher.
Sean Perrett of Perrett Construction Ltd recently begun the process of rebranding his business in Christchurch.
For brand development, we’re talking completely redeveloping the business’ identity, quotes have come back at up to $7,500. That does not include getting all his work vehicles re-sign written, updating his business cards, and does not touch on a website.
New websites can be as expensive or as inexpensive as you please; ranging from $300 — $7000 +. Not including monthly hosting fees. This price depends on whether you are willing to create your site based on a template, or whether you’re willing to pay someone to build it from scratch.
The best way to know what to spend on marketing throughout the year is to have a solid business plan in place which includes a marketing strategy — that means knowing your goals and the growth you wish to receive for your business. For business plan templates or tips, The Ministry of Business, Innovation and Employment has some useful links.
Advertising is a whole new kettle of fish and knowing your target market is crucial to getting this right. The CMO Survey found that spending on traditional advertising (any form of advertising that does not involve the internet) i.e. radio and television, has declined across the board while digital marketing spend is on the rise.
That’s not to say that traditional means are not successful and having a solid marketing strategy in place will help determine where your dollars would be best spent.
Again, it all comes down to your target market and there will be aspects of trial and error. Remember to keep track of what is working and what is not, and don’t be afraid to try new revenues.
By Natalia Rietveld