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How much should you be investing in your company’s marketing program?

Kelly Coffey
Harebrained Marketing

I met with a client recently who asked, “How much should a business like mine spend on marketing?”

It wasn’t the first time someone has asked me that question. After all, it’s an important answer to know. The problem is that there’s no magic formula, as every company ” even those in the same industry ” faces unique challenges and opportunities.

Rather than blindly picking a number on budget-review day, take a few things into account. Ask yourself these four questions to take a more systematic approach:



All of your decisions should be based on your business goals. Want to drive in more local customers? Want to make current customers more loyal? Want to improve off season sales? When you have clear goals in mind, the paths to reaching them become more obvious. You will see the tangible results of marketing. At that point, spending on the right marketing efforts becomes an investment instead of an expense.

Dig up this information from your trade organization.

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What do most businesses like yours spend on marketing as a percentage of sales? That’s a great number to compare to your own efforts. But remember: There are plenty of reasons to spend more or less than the industry average.

They may not want to tell you, but it’s easy enough to track their marketing. Keep an eye on all they do and you can get a pretty good estimate on how much they’re spending. Ads in the paper? A fancy new brochure? Be warned: This is only a good comparison with competitors similar in size and customer base. Otherwise, you’re likely to have very different goals.

Sadly, this is often the only question many businesses base their marketing budget on. While it’s an important one to ask, it shouldn’t be the sole basis for your budget. Marketing is about future sales. Spending only leftovers will leave you with tepid future sales. After all, if you know you’ll get a good payback on certain marketing efforts, you will always find the money.



Factor in all four of these questions when planning your budget. Mix in some gut instinct to guide your decision (after all, you know your business better than anyone). Invest smartly in marketing and those efforts will become the investment they should be. Otherwise, they’re just too expensive.


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