Tuesday 21st September, 2021
Every business has to go through the cumbersome process of determining how much they need to spend on marketing. The process is never easy with the changing market atmosphere, especially for small businesses.
The startup companies as well as other small businesses need to maintain a healthy balance between their revenues and costs and invest in various strategies to enhance their market growth. If they invest too little, then it will be a waste of money and time.
On the other hand, investing too much is a strain on their budget. The big question, therefore, is, how much budget is adequate for proper marketing?
To answer this question, it would be best to look at some of the top trending statistics on small businesses and their marketing budgets throughout 2020 and 2021. Also, please find out how small businesses can curb wasted marketing spending to enhance their budget allocation.
It is highly recommended that small businesses with revenues less than 5 million rands to allocate about 7-8 percent of their revenues for marketing expenditure. The initiative can work successfully for companies with a 10-12 percent margin after all their expenses.
However, there are various outlying factors that marketing teams may use in choosing a marketing investing platform. For example, 73 percent of companies invested in marketing using website optimization processes, while only 20 percent invested in machine learning and more so automation in 2021. This disparity shows how diverse businesses work according to their specific needs.
According to research, the top priority platforms for most companies were digital marketing, web optimization, and digital media and search. The percentage for investments in these three marketing strategies was 73 percent for web optimization, 65 percent for digital media and search, and 57 percent for digital marketing.
Market predictions show that these three trends are still usable and will continue spiking in 2021 and beyond.
Back to small businesses, there has been a constant increase in marketing investment over the past 10 years. The current revenue landing in 2021 is around 13 percent which is about 5 percent higher than 2011.
Industries in the B2B sector are allocated about 10 percent revenue on their products, almost similar to the 10.1 percent used by B2C companies on services. On the other hand, B2B services allocate 15 per cent of the total revenue while B2C products allocate about 18 percent.
Various factors affect the marketing choice of most small businesses. You may consider the growth stage and type of business to market correctly. For instance, startups who are just getting off on their feet may need up to 20 percent of sales on marketing to match the stiff competition. Here are some of the ways to maximize full marketing potential and avoid using too much or less.
You can also manage your marketing budget effectively by framing it concerning your business revenue growth over time.