How much should you budget for online marketing?
I started into eCommerce store 10 years ago. Now one of my sites has grown in size to 100,000 products. Even so, the orders coming in don't cover the website expenses.
I have a full-time job during the day and I don't do much marketing besides Facebook or Instagram posts when I find the time.
Marketing & writing are not my strong suit. When I do have time to work on the website, I find myself updating data and adding more products which is what I enjoy doing.
If I want to hire a company familiar with automotive industry to manage my marketing, how much could that cost me? Any recommendations for an agency?
Depends on marketing strategy and on achieved results. On average, marketing budgets make up 11.1% of the total company budget.
Let me tell you that in order to forecast your business operations and adopt efficient promotional tactics, you must have a business plan ready beforehand. A proper business plan helps you identify your business strengths, weaknesses, opportunities, and threats easily, so you drive more customers to your service offerings and attain a higher growth rate easily. That should be your first move before you move ahead for choosing the affordable promotional strategies.
Best of Luck!
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I realise that I am joining this thread very late, but I couldn't help but notice that nobody seems to have really answered your question about budget. First of all, congratulations on having grown your store so much. A store with a hundred thousand products is massive! If the orders coming in still don't cover your website expenses, the first thing to do is to figure out where the problem lies: is your business turning a gross profit on each order but not a net profit, or is it the case that it isn't even making a gross profit? The two scenarios require very different corrective strategies, which I can't really comment on without knowing a lot more specifics.
As for the marketing budget, you have an advantage that new businesses don't: you have real data. By combining your business's past data (such as sessions and conversion rate) with a little insight from journals, news sources, and tools like Google Ads (for search volumes), you can arrive at a reasonable estimate on the overall size of your market. That is if you're selling automotive spare parts online, how big is that market? How many dollars worth of automotive spare parts are sold online every year? Once you have that information, you can calculate the size of that pie that you're currently getting, and also make a reasonable projection of how much of that revenue you would like to get in a defined future timeframe.
Based on this goal/target, you can then work backward and allocate a marketing budget. Supposing your target is that you'd like to generate $100,000 in revenue, you can then look at your business's financial figures and decide that you will allocate, say, $10,000 towards marketing to make that happen. Without a definite revenue or sales goal, it is difficult and pointless to decide on a marketing spend.
The exact proportion of marketing budget varies from one industry to another. Broadly speaking though, earmarking somewhere between 15 to 20 percent of your revenue target is a safe bet for most product categories. Note that this may be very different for your particular industry, so do NOT use these numbers without verifying if they're really applicable to you.
Another useful rule of thumb to know with marketing spends is that it is always good to maximise them sooner rather than later. Many businesses try to skimp on marketing in their early days, with the idea that they'll spend more later once their business grows and cash flow improves. This is ill-advised, especially for businesses that are new or that have ambitious growth plans, because there is no guarantee that the business will survive to implement that future increased spend, if it doesn't generate enough sales to stay afloat in the first place.
A good sign of an effective marketing strategy is that the overall spend remains more or less the same (or increases only slightly) year on year, but as a percentage of overall revenue, it reduces steadily year on year, thanks to good revenue growth.
Hope this helps. Good luck with your business.
It really depends on how big your company is, and what are your goals year by year. You could start small by hiring some BPO and I think that wouldn't cost you as much. When you've reached your KPI's then try to hire someone there with you so you could focus more on the business and become more hands-on with what's going on with your company, that way, you can also learn how to market so if you have some free time, you can study the psychology behind it and maybe learn marketing so that you know what stuff is happening and you get your investment with marketing is worth.
Hope this helps,
Excellent question! I actually wrote an article on this at the beginning of the year.
How To Budget for Your Best Online Marketing Campaign (http://bit.ly/2Q1d7De).
Your inbound marketing budget can be determined by several factors including, but not limited to: (1) your market, (2) your products/services, (3) your objectives, and (4) your audience.
The cost of marketing would depend upon your responses to the factors above.
The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin—after all expenses—is in the 10 percent to 12 percent range.
Here's a great article by Molly Meyer on nuphoriq on budgeting for online marketing:
If you are looking for just social media management: inexpensive solutions like flock (http://flockmgt.org) will run around $100/mo per platform.
Agency prices for just social media management will start at around $997+/mo.
If you are looking for ROI positive digital marketing services: projects will run on a 90-day R.A.C.E. framework, and you will want to budget at least $2,000/mo for advertising spend in addition to the agency services rendered.
I hope all of this helps you determine a budget for your business! Please feel free to contact me if you need any further information.
Have a wonderful day! Thank you.
Marketing is an essential part of any business, and eCommerce is no different. However, you must leverage your expenses with your revenue and this is where email marketing takes the cake. Shocking as it seems, every $1 spent on email marketing for eCommerce gives $40 return far outstripping banner ads ($2) and keyword ads ($17), according to MarketingProfs.
This means you do not have to spend a lot on automated email (and mobile notification) marketing to get a huge return. That said, to create that perfect email/notification which caters to the tastes and needs of each of your potential customers, and sending each just when they'll read it, is a huge task. You'll need a team of expert engineers and marketers to even scratch the surface of the possibilities in this field. And this will cost you a bomb!
My suggestion is - use an existing marketing automation tool that specializes in eCommerce. One of the best is Snowflake by TargetingMantra. They have helped their clients see over 85% increase in click rate and 27x ROI. For this, you'll have to invest less than 5% of your overall investment. You can check them out here - Targeting Mantra - emails.
My suggestion is to try out their free campaign before you decide to buy credits. See how well it is working for you, how much has your customer loyalty and recency increased, how has your revenue been impacted, and only then proceed for a paid campaign.
Hope this helps.
When it comes to cost to market, you're talking to Youtube's "White Trash Web Developer" lol so I'll be the first to tell you, it is possible to do some amazing game breaking marketing and drive ginormous traffic for entirely free.
However nothing in life is free, if you don't pay in money, you're certainly going to pay with your time. Some sage advice in terms of driving traffic utilizing any method:
Quality over quantity.
As it stands the site I'm driving traffic to is barely bringing in 200 visitors a day. Well, my last niche was an adult video tube and I was pulling 6-10 thousand visitors a day at one point. The site was bringing in about 3,500 a month.
Well, since this new site is targeting SEO and web design clients, I just scooped up a customer with my measly traffic and he just hired me to do a 2,000 dollar keyword/link building campaign. Think that proves my point there.
Budget if you want to use paid ads for Google, you should probably be able to cover at least 500 clicks in Google Adwords, and should only be attempting 4-6 banger longtails and things that are all buyer intent. Be sure to use quotes for all matching keywords and brackets for an exact phrase in exact order.
If you're doing Facebook ads, only do those after you've thoroughly studied audience insights and confirmed your target audience and that they're not a cash only crowd and look like an n00b later on :p.
Facebook ads pretty much across the board are for email capture and brand awareness. Unless your selling like 10 dollar T-shirts that are off the chain funny, you should be prepared to deliver amazing content and have a sales funnel on deck. According to my boy Rand Fishkin MOZ Founder, 6-8 return visits to the crib is the conversion G spot.
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It is not a simple question, but it’s just as important. And it’s a popular thing to be thinking about this time of year: how much should you be spending on digital marketing?
If you spend too little, your message won’t make it to your target audience. If you spend too much, you won’t have the budget you need for other important aspects of your marketing plan.
1. Start with a clear direction.
The first step in any plan is to pick a direction and set your goal. What will be your marketing team’s main focus next year?
2. Analyze past efforts.
What strategies did you spend your money on last year? And of those, which ones were most successful? Which ones were a dud? Which ones showed promise for future tests?
3. Research industry trends.
While you obviously shouldn’t copy your competitors’ marketing strategies, you should know what they’re doing. Also, you need to be up to date on industry trends.
4. Crunch the numbers.
Once you’ve set your goals, analyzed your past campaigns and researched industry trends. It’s time to crunch the numbers.
5. Use your budget to make the biggest impact.
Deciding how much to spend is a good place to start, but you still need to make sure each dollar goes as far as it possibly can.
Good luck with your business! Make this year your best year yet. Digital marketing is becoming more important each year—don’t get left behind. Determine your digital marketing budget for the new year and make it count.
Robert Dale Analyst from Prowritingservice.com.
Online marketing is effective for every startup, sme or enterprise. It also costs high in terms of your goal to earn a certain amount of revenue.
My advice is to hire a marketing company with the budget of 30% of your revenue from the store. When you start getting decent results in the first 3-5 months in revenue then you can invest more to promote your products on more channels with more of a budget. There are different options here to find out how much will it cost you: https://www.blurbpointmedia.com/how-much-seo-cost/
And try to focus more on the work you enjoy. The focus is saying no to all the great opportunities except one. Make it your full-time job.
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