You’ve got to spend money to make money, according to the old saying, but how much should small and medium-sized businesses be investing into marketing and advertising? Whether your business is growing rapidly or you are just figuring out how to make ends meet, marketing is an essential component of company operations that you can’t afford to ignore. While some businesses do very well through word-of-mouth marketing, there is a limit to how much you can scale through organic referrals alone.
The U.S. Small Business Administration recommends that businesses generating less than $5 million a year spend about 7 to 8 percent of gross revenue on marketing and advertising. Other industry experts have suggested anywhere from 5 percent to 14 percent.
If these numbers seem high to you, or you are wondering how much you are realistically able to invest in marketing, here are five ways to stretch your marketing and advertising budget to get the most bang for your buck.
- Social media. Social media platforms are free marketing tools that can help you raise brand awareness and gain customer trust. While social media followers don’t necessarily equate to sales, building out your Facebook, Instagram, and other platforms can be an extremely valuable long-term marketing investment. Make sure you are using your social platforms to provide value to your followers and engage with them regularly.
- Experiment. Marketing is all about experimentation. Instead of sinking your entire monthly marketing budget into ads or cold email campaigns, opt for small, cost-effective experiments to see what type of messaging and content delivery strategies resonate with your audience most right now.
- Partnerships. Partnerships and collaborations with other businesses are an affordable way to build your brand and get exposure. When creating partnerships, you want to work with companies that target your same demographic but are not direct competitors.
- Media relations. Pitching your business to local media is a way to get free exposure for your company. When pitching, make sure that you provide a specific, timely angle or a reason that a certain publication’s audience would be interested in the story.
- Incentivize referrals. By incentivising your current customers to recommend your business, you can boost organic traffic and sales. Affiliate programs, giveaways and contests are some relatively inexpensive ways to increase referrals.