Often, businesses will look at their competitors in envy, wondering why they are growing so much faster or appearing so much more successful.
While this can come down to a number of factors including reputation, clear communication, or leading business practices, one factor that can have a major impact is marketing spend.
You’ll never know exactly how much your competitors are spending on marketing – it could be double or triple your spend or even more!
$100,000 not out of the question
I recently had a discussion about a very successful Accounting business, exploring how they have achieved their success. I said, “you know that hypothetically they could be spending up to $100,000 per year on marketing?”. “What? No.” was the response. But, yes! If their revenue is approaching $1M, $100,000 on marketing is definitely not out of the question.
I am often asked ‘How much will it cost to promote my business?’, well… how long is a piece of string? A business can obviously spend as little or as much as they like on marketing and promotion, but, as we all know, the output will reflect the input and cutting corners will inevitably lead to disappointing results.
Instead of talking about how much it will cost, I always advise people to establish a budget first. Decide how much are you comfortable spending on marketing. Then you can work out how best to allocate your budget for maximum ROI – because after all, it’s not a cost, it’s an investment!
So, how much should you budget?
International benchmarks suggest that, on average, businesses spend 9 to 12 percent of annual revenue on marketing.
Well established organisations wanting to maintain and not necessarily grow may spend as little as 6%, however, new or growing organisations will spend up to 15% (even 20% in a short season of intense growth strategy).
Back to our hypothetical scenario above: an organisation with a turnover close to $1M could easily be allocating 9 or 10% to their marketing budget – this will buy you a lot of advertising, a lot of content creation, and a lot of new client leads!
As accountants, I am sure you can do the maths(!) – a Practice with $300,000 in revenue should allocate $25,000 – $30,000 per year.
How does that compare with your current spending?
Are you looking to grow your Practice?
Talk to us about getting the best ROI on your marketing spend. We have great strategies, specifically for Accountants, for establishing brand value, making sure your website is converting and targeting high potential clients.
We’d love to book a free consultation call with you, to discuss your personal business goals and challenges and see how we can help.
Get in touch or book your call today.
Steve Toews, Principal