Many of the businesses who come to us admit they have a common problem: they aren’t sure how to set marketing budgets that work. They want to set aside enough money to keep sales coming in, but don’t want to go so far that it cuts into their profits.
Finding the right balance can be difficult. That’s true for any business, but especially in the world of manufacturing, where margins can be so tight. You have to have effective campaigns in place to create interest and sell out inventory. At the same time, it’s possible to overspend, get declining results from a bigger budget, and hurt your bottom line performance as a result.
So, how can manufacturers set good marketing budgets under those conditions?
We’ll begin our answer by admitting that there isn’t any single formula or solution that’s going to work for every business and situation. To get an answer that’s customized for your company, it’s best to meet with our team and let us evaluate the challenges you’re facing.
With that being said, though, there are some basic guidelines manufacturers can follow to get the marketing expenditure answers they need. Let’s take a look at what you have to know to put your manufacturing marketing budget at the perfect level…
Cover the Basics of Marketing First
Depending on what your current marketing materials look like, you may want to revamp your existing materials first and then plan on smaller monthly or annual marketing budgets later. That’s because it’s virtually impossible to compete in today’s world if your website, product photos, spec sheets, and other materials are lacking.
In other words, it’s going to be hard to see a positive ROI from your marketing budget if you don’t have the basics and fundamentals covered. In that situation, launching new promotions without taking care of the essentials is only going to lead to sunk costs, not increase sales.
Spend According to Real-World Results
Assuming you have the basics you need to attract customers and sell to wholesalers or the public, a good way to think about your regular marketing budget is to work backward from results. In other words, if the money you’re spending on campaigns seems to be coming back in the form of more or bigger sales, then you should increase your spending a little to see if it remains profitable.
It’s ironic, but we sometimes come across business owners and executives who are leery of increasing their marketing budget even though they are getting outsized returns from their current spending. If you think you can double your sales by adding 10% more to your campaigns, why not give it a try?