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Business Marketing Strategy: "How Much Should I Spend On Marketing?"
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Business Marketing Strategy: "How Much Should I Spend On Marketing?"
While the marketing industry is filled with strategies and ideas, it’s easy to get flustered by all the things you “should” be doing to help your company grow. Ultimately, it all comes down to planning and budget.
Over the past five years, we’ve developed what we call “marketing math” to help clients define exactly what they should be spending on marketing:
New companies: For companies that have been in business for one to five years, we suggest using 12 to 20 percent of your gross revenue or projected revenue on marketing. (Companies less than a year old, tend to need to ramp up before spending marketing dollars.)
Established companies: For those companies that have been in business more than five years and have some market share/brand equity, we suggest allocating between 6 and 12 percent of your gross revenue or projected revenue.
While this may seem like a lot, remember new and emerging brands are looking to capture new market share and develop brand recognition with an audience that has absolutely no idea who they are. That’s why it’s so expensive. Once the brand is established and a portion of the market is brand-conscious that number drops significantly.
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