Creating a Marketing Budget

How much money should you spend on marketing your services or your products?

Here is a way to look at the issue.

How large is your current customer base and how much do they typically pay for your service or your product?

Do your customers generate enough referrals to keep you busy?

The larger your customer base, and the more active they are in generating referrals for either products or services, then the less money you need to spend on marketing -- to bring people in the door.

You can also read this article on 3 different types of hair salons and how much they need to spend on marketing.

I have a friend who's a CPA and he does the books for non-profit organizations. He really doesn't have to spend money on marketing at this point since he has a stable client base and he gets referrals from them.

However, if he wants to grow his business, say hire an office assistant, and go for higher paying non-profits as clients or market his expertise in a different way, then he'll have to spend money on marketing even if it's putting together a simple brochure and perhaps a simple web site.

The money you spend on marketing doesn't have to be much, but it should reflect the overall company goals and objectives.

Ask yourself:

1. Do you provide a premium customer experience or premium product?

2. Do you have more middle of the road services or products?

3. Do you have more of a mass market commodity item?

The more premium of an experience you provide, your marketing dollars may be less since you need fewer people. You just need to target the money to the right people and audience.

Or, you could spend proportinately more marketing dollars to reach fewer people if the clientele is high end. However, if they're satisfied with your product or service then they should generate word-of-mouth leads.