Setting a digital marketing budget can be tough. Especially during these uncertain times, so how do you think through how much you should be spending and what the potential return should be?
Now could be the perfect time to re-evaluate your company’s digital marketing strategy and how much money you should be investing in it.
Here are three simple ways to establish a budget based on data.
1. Cost Of Advertising
How much will it cost you to acquire a customer? Answering this simple question will provide high-level guidance on whether advertising will be an expensive or relatively cheap proposition. It can also give you an idea of how many customers you can expect based on what you’re spending.
Working out the return on investment will help your company evaluate the efficiency of an investment in digital marketing.
2. Revenue Per Customer
Establishing a cost per acquisition (CPA) goal will allows you to still see a return. Running your first campaign will quickly let you know whether achieving that CPA goal is realistic, or whether you need to adjust. Remember, you’ll see different costs per acquisition for different channels, so it’s important to test different ways of marketing to prove out those costs.
Lastly, it’s important to know what your actual revenue per customer is. Ideally, you’ll want to know the lifetime revenue a customer represents — sometimes short-term revenue may be low, but recurring revenue can be a much larger opportunity.
3. Percentage Of Your Total Revenue
Finally, looking at your marketing budget as a percentage of your total revenue tells you how much you should be spending based on your size. If you’re a large company, you’re unlikely to move the needle with a very small budget. Take a look at the competitive benchmarks for other companies by industry.
Here at Boss Digital, Our creative team help our clients to communicate their digital brand better.
We specialise in ecommerce web design for startups and SME’s in the following industries, beauty, food, local services including solicitors, accountants, GP’s, Online retailers, Car Hire companies and the manufacturing industry.
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