Today I’m brewing up an herbal Ethiopian coffee while discussing how much you should be paying for your marketing.
Disclaimer, every company is different, which means each company’s marketing needs will be different as well. I’ll be covering the basics so you can get a general understanding of how your spending budget should look.
Let’s start by thinking about your cost per acquisition, or CPA. How much are you willing to spend versus how much it costs you to obtain a customer? It’s important to know your annual cost or customer value and get an idea of your target CPA.
When converting a customer there are many underlying costs aside from paid advertisements that should be considered. When considering your marketing budget you must take into account all of the other factors that will affect your budget. For example, how much it costs to get a lead, how many leads are needed to reach your target sales, and so on.
Another aspect that needs to be considered in your marketing game plan is your sales process. It’s one thing for someone to click on your ad, it’s another to get them through the process of buying into your service or product.
When you don’t have a sales process in place you can get hundreds of customers initially coming to you, but then you lose out by not knowing what’s next or where to direct them. It’s vital to understand and be able to properly execute that process.
Tomorrow we’ll be taking a deeper dive into executing your budget and marketing campaign. See you in the morning!