How much should I spend on marketing?
This is a common question that marketing consultants gets asked on a regular basis.
The simple answer is that there is no hard a fast rule – it depends on the competitive environment, the stage of business development, the product or service category and the balance of advertising designed to promote the brand vs advertising designed to generate a specific response.
As a result of these factors, marketing budgets are best set based on careful analysis of a number of factors as part of a Marketing Strategy not via the often used % of sales method.
If you are looking to develop a deeper understanding of your marketing budget then there are two good places to start.
Brand Awareness- Analysing the level of advertising that is appropriate to reach your target markets with appropriate levels of frequency and credibility
Specific Response – Analysing the response and conversion rates you are achieving from various forms of advertising
Brand awareness is a direct product of the Marketing Strategy – by identifying the key target markets and having an understanding of the competitive environment it is possible to establish a picture of the level and types of “brand” advertising required to generate awareness of the brand for new customers and reinforce the message with existing consumers.
Planning the elements of the campaign designed to generate a specific response is more closely aligned with the sales budgets and requires analysis of the response and conversion rates you are achieving from various forms of advertising.
Using response and conversion rates as a starting point allows MJH Group to determine the expected result for a particular level of spend in a particular area and plan the marketing strategy accordingly. This is correlated to the sales budget to help plan the necessary mix of advertising required to drive the response to deliver the sales result.
MJH Group Marketing supports companies who want to be more innovative and effective in their marketing by providing marketing tips and expertise to develop strategic and tactical marketing programs.
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With the uncertainty of the economy, legal marketing agency Beyond All Reasonable Doubt Marketing is advising law firms to take a serious look at their budgets. While marketing, advertising and public relations dollars frequently are cut to reduce expenses, marketing experts agree that a down economy is actually the time when marketing efforts should remain in place, and if anything, be enhanced.
“When other law firms reduce their spending and cut their marketing, they have less presence in the marketplace,” explains BARD Marketing founder and president, John Sailer. “This means the time is ripe for a savvy law firm to grab market share – to reach the audience that is still there but who is hearing from fewer of your competitors.”
When planning your law firm’s budget, you should start by identifying how much you want to spend. While there are no hard and fast rules across the different types and sizes of law firms, it makes sense to budget your marketing as a percentage of expected revenue. Several studies have pegged overall law firm marketing budgets to be between 2 percent and 3 percent, with leading firms spending 5 percent or more.
Second, prioritize your initiatives by looking at both costs and expected benefits. This is easy if you tracked your efforts in past years. Remember that some of the lower cost initiatives may bring strong value while some of the higher cost initiatives may bring very little value. With this said, it is imperative to track outcome of every initiative.
BARD Marketing is experienced in budgeting and planning for short- and long-term marketing and advertising plans, and enables law firms to achieve and track ROI for their marketing activities. For more information or to request a report on Yellow Page Advertising Costs and Effectiveness, please visit www.bardmarketing.
BARD Marketing offers integrated marketing and advertising services, including website development. All services are designed to complement one another and form a structure of synchronous marketing efforts that collectively increase leads for law firms. BARD offers a no-cost, no-obligation review of current sites and promotional materials, and can share innovative strategic concepts, during this review.
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