Let Proof Drive Your Marketing Budget
Imagine amassing a real estate portfolio of over $4 million in 1986, only to declare bankruptcy 2 years later.
By Hubert Kang
“A budget is telling your money where to go instead of wondering where it went.”
— Dave Ramsey
Imagine amassing a real estate portfolio of over $4 million in 1986, only to declare bankruptcy 2 years later.
That's exactly what happened to Dave Ramsey (much of his fortune in the 80's was built on debt).
It was a rocky road, but one that ultimately led to his current platform. Through hard work, he was able to turn his fortunes around and today is regarded as one of the leading voices in financial management. In fact, if you didn't know his origin story, you'd never guess he was ever in such dire circumstances.
- Budgeting is tricky.
- Budgeting to manage debt is one thing.
- Budgeting to optimize growth is another.
The latter is what makes Marketing budget setting so complicated for Small Business Owners:
You don't want to leave future revenue on the table by playing it safe.
You can't afford to get over your skis by committing too much.
It's a high wire balancing act where every step counts.
It's important to adopt a "Both - And" vs. "Either - Or" mindset when it comes to setting (and adjusting) your Marketing budgets.
Over-optimism can ruin business owners' marketing budgets much in the same way that debt can throw our personal budgets into a tailspin.
Grow Your Marketing Budgets with Proof, not Optimism.
Most small businesses struggle with awareness, so an "Either - Or" approach is a losing proposition. You can't think to yourself, "I'll invest in office space X or subscribe to Y OR I'll do marketing." There is no Or.
You must advertise.
Full stop.
A "Both - And" mindset for your Marketing is the 3rd door. The portal to a world where you test what you can afford, increase as wins come in, WHILE operating in the black.
The 3rd door manages your budget and decides "where it goes rather than wonders where it went."
The wins are your proof.
2 Takeaways
1. Marketing Can Be a Resource Vampire (Besides Just Money). Earned Media sounds free until you factor in the costs of design and keyword subscriptions that may have helped you get there. On top of that, ramping up on tools like Canvas and Google Keyword Planner takes time. The "shiny object" syndrome created by new marketing tools and AI is hard to avoid and robs your time.
2. Don't Turn Your Back on Guerilla Marketing. This is particularly true for small businesses. Sign spinners, bandit signs, creatable inflatables, mailers. They're still around because they still work. While Digital Advertising platforms are amazing feats of targeting, reach, and measurement, they're also designed to take your money and can be difficult to turn off.
1 Action
Monitor your ROAS (Return On Ad Spend) for all paid media campaigns. Simple illustration: if you spend $100 on paid media that yields $300 in sales, your ROAS is 3X. (This doesn't necessarily mean you're profitable, but that's a topic for another time)