When considering whether to hire a marketing expert, DIY, or skip marketing altogether, it’s important to know how to budget.
Most CPAs, banks, and other money watchdogs will tell you not to let a marketing budget exceed around 7% of your gross revenue (i.e.: any dollars that come in prior to expenses, taxes, and whatnot). But what does that mean for those just starting out or with little to no revenue at all?
If you’ve got a few sales coming in, the typical recommendation is to be a little more generous with your marketing dollars in the beginning and shoot for around 20% of your gross revenue. Once you’ve established market share – a fancy way of saying “once your head is above water and your sales can sustain your business” – you can usually knock this down to ~10-20%. However, whether you’ve got sales coming in or not, I find it’s easier to look at how much it all costs, then work backward from there.
Here’s a look at average costs for establishing a brand and marketing your products/services:
|Website design & dev (5-10 pages)
*These prices are based on the run-of-the-mill needs of a small ecommerce or services-based business and do not include ad spend (typically $500-$2,000 per month for smaller businesses). These prices can certainly get much higher if we’re talking about more-complicated-than-normal customizations or work with higher-profile agencies. They can also get lower if you want to hire your brother-in-law’s neighbor’s teenage kid who has Photoshop and went to coding camp once.
The bare essentials for every business are a unique logo and a website. We’ll build our minimum costs from there.
Averaging things out, a logo and website will cost us around $2,600 with freelancers or around $5,400 with an agency. These costs likely won’t include content nor ongoing maintenance. It’s up to you to determine which or if neither of these options are financially manageable.
Keep in mind that businesses that choose to invest in a professionally developed brand and website are proven to see lower customer acquisition costs, higher customer retention rates, and higher return on the dollars they invested in user experience (UX).
Consumers simply feel more confident trusting their spending dollars with companies that reflect quality and look like they put care into every aspect of their business.
When budgeting, it’s important to know when to enlist the help of an expert for ongoing marketing.
There is no one-size-fits-all solution when it comes to marketing. Even when comparing two brands in the same sector, each business is going to need an individualized approach to their specific brand with budget (or lack of) being the key consideration. SEO, paid ads, and social media are some of the more well-known strategies for growing awareness and sales. There are some aspects of these you can DIY, and some you should always engage an expert for.
Good content with strong SEO to support it will help you not only garner more site visitors over time, but will also help keep prospective customers engaged when they do reach your site. For high-traffic and high-intent pages such as your home page, about page, category pages, and sales-focused blog posts, it’s important to have an expert in your corner. SEO per page will cost around $150-$750.
Paid advertising such as social media ads, Google Shopping, PPC, ad retargeting, and the like should always be done with hand-holding. With these types of advertising, you’re not only paying for the time it takes to implement the strategy, but you’re giving non-refundable cash directly to a third party (like Google or Facebook) in the hopes they’ll punt back customers who’ll spend at least what you’ve invested with zero guarantee on performance. Add in the varying needs of target market subsets and the ever-changing industry-specific restrictions to abide by (including changes that ad platforms purposefully keep under wraps), and you’ve got a recipe for a lot of wasted money and potentially permanent ad account shutdowns. This is a case where you’ll save more money by spending it with someone who knows what they’re doing. Paid advertising costs vary widely due to the types of campaigns you run, your ads’ quality & relevance with your target market(s), when & where you’re running your ads, your bidding strategy, etc. Your ads management cost can also vary based on your ad spend, of which some ad specialists will charge a flat fee, a percentage (typically ~10-20%), or a combination of the two to manage. But for our purposes, let’s assume our ad spend budget is around $500-$1,000/mo and we’re paying a flat fee for management. That’ll bring our ads cost to around $1,500-$2,700/mo per platform including ad spend.
Social media is an especially great avenue for businesses with a minimal starting budget. It offers a great path to reaching a broader audience typically for the cost of time. However, you’ll want a specialist’s guidance when establishing your brand’s social voice, platform-specific posting strategy, and social ads. Per-platform social media management might cost around $200-$1,200/mo for posting and around $700-$2,200/mo for ad management including ad spend (based on our assumed $500-$1,000 ad spend budget).
It’s important to remember that these are individual service price estimates and not combined costs for a comprehensive marketing strategy. Your business will likely need mix of some or all of these marketing solutions to work in conjunction with one another.
It’s tempting to take the cheap route. But you’ll lose more money than you’ll save.
There are loads of websites that give you access to freelancers all around the world for cheap. These sites often tout fees like $99 for a logo or even $5 for a website. What they don’t tell you is 1) the designs you’re getting are recycled over and over (which is how they’re able to charge so little) and 2) they’re horribly unfair to the freelancers doing the work (often skimming 20% or more off their already low wages). This leaves them zero motivation to provide you with anything more than a template design that hundreds of others are also using.
In situations like these, it’s important to ask yourself “what kind of quality would I guarantee for what they’re charging me?”
Your penny-pinching can cost you more than you think you’re saving. If you have the $99 to pay for a reused design, save your money for a little longer and hire a local designer instead. It’s more important to wait and invest in building your brand right from the start with something unique to you that can truly set you apart from your competition.
There are a number of things you can do on your own to save money.
There are certainly some things that you should keep strictly within the hands of a professional. But there are smaller, more manageable bits that you can tackle on your own.
1. Read every help article you can get your hands on. Here are just a few of my favorites:
The Taproom is a Shopify-specific agency with straight shooters at the helm. They offer non-spammy quick reads with tips that are easy to digest and implement. They cover things like how to create the ideal homepage, how to use email marketing effectively, and 5 tips on improving your abandoned cart strategy.
A Better Lemonade Stand is a conglomerate of experts in the ecommerce space offering tons of tips and resources. You can even filter their blog by what stage your business is in. You can learn how to name your business, get help with simple tasks like adding a contact form to your Shopify site, or even learn a little coding.
Neil Patel is one of the top digital marketers in the world and offers an endless stream of knowledge. He tackles topics like factors that influence your site’s credibility, a beginner’s guide to Google Analytics, and how to write the perfect Facebook post.
2. Take full advantage of any Support teams you have access to such as those associated with your website platform and any apps or plugins you use.
3. Go deep down the rabbit hole of competitor research and look at every detail of your competitors’ websites. Take note of what the businesses you admire do on their site, in their email marketing, with their social media, etc.
4. Don’t be too proud to Google every single simple question you have.
Implement what you learn where you can. When you get to issues like logo design, increasing traffic to your site, spending money on ads, growing sales, and the like, it’s best to press pause and reach out to an expert to make sure you’re not overspending your energy or money in the wrong direction.
Only you can execute the three most important aspects of marketing. And they’re free.
Every successful business commits a substantial amount of its efforts to testimonials, referrals, and strategic partnerships.
Testimonials offer social proof that a product or service delivers on its promise. The right testimonial incentive can also encourage referral business, resulting in free marketing.
Referrals are by far the cheapest way to grow your sales. Referrals from existing customers offer an unmatchable sense of goodwill, lowering trust barriers between you and your prospective new customers. And when done right, they come with free access to an existing customer’s friends, family, coworkers, social following, etc.
Strategic partnerships give you access to customer groups you may not be reaching just yet, helping to propel your brand awareness.
When you work these three together in the right way, you have a recipe for growth with little to no effort.
If you’re still debating whether you can afford marketing or you’re not sure what is crucial for your business, we can help.
If you’re not sure where to invest or what to avoid, we specialize in providing clear guidance to point you in the right direction.
We don’t offer in-house marketing services and we don’t accept referral fees from those who do, so we have no interest in encouraging you to spend money where it won’t do you any good. If you’re better off with DIY or hiring your cousin’s barber’s friend for cheap, then that’s what we’ll recommend.