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5 Steps to Maximizing Your Marketing Budget

October 14 2013

Guest contributor Chad Bhalla of WebsiteBox says:

webbox max mrktg budgetThe most important number you need to pay attention to with regards to marketing is ROI (return on investment). The whole purpose of marketing is to spend some money to get more customers and more money in return. Good advertising always generates a profit.

Here are five steps to ensure that you maximize your marketing budget.

1) Set Goals and Define Your Budget

Make sure you are clear about what you want to achieve through your marketing efforts. You obviously want to get more clients, but how are you going to generate leads?

Perhaps you offer a monthly newsletter and your website has contact forms all over it. Then your goals become more clear. You want people to sign up for your newsletter and you want them to submit a contact form to you.

After setting your goal, you need to ask yourself how much is this goal worth to me? Let's say you would pay $10 per lead that comes in from a newsletter sign-up or contact form submission. Then you need to determine how many of these leads you need to generate a client.

For example, 150 leads generate one client that closes and turns into a commission. If you paid $10 per lead, then you would have spent $1,500 in generating leads through marketing, which turned into one client that generated a $3,000 commission. This means that your marketing efforts have led to a $1,500 profit. You need to set your marketing budget based on these calculations.

2) Research

After you have determined a goal, you need to research various advertising mediums that could help you achieve this goal and figure out which ones you want to try out. Some ideas that you should look into are:

  • PPC [Pay Per Click] Advertising - Google Adwords and Bing Ads
  • SEO - Hire an expert or learn it and do it yourself
  • Social Media Advertising - Facebook, Twitter and LinkedIn Ads
  • Social Media Marketing - Facebook, Twitter, Google+, LinkedIn, Pinterest, etc.
  • Classifieds and Syndication Sites - Craigslist, Zillow, Trulia, etc.

3) Test

Once you have decided on where you are going to spend your time and money, you need to begin testing. Pick at least three different avenues that to advertise on and determine how much you plan to spend on each. This is where you need to channel your inner gambler and ask yourself which form of advertising do you expect to generate the most amount of leads that close.

Let's say you are a strong fan of PPC, but a little skeptical of SEO and social media advertising. Set a test budget of $2000 for one month. Put $1000 into PPC, $500 into SEO and $500 into social media advertising. See which one generates the most amount of leads for you and measure the amount of leads that turn into a client.

4) Monitor

After creating your test, it is important to monitor the results to determine which source is generating the most amount of clients for you. If you are measuring leads generated (newsletter signups and contact form submissions), then you can easily use Google Analytics to measure how well your campaign is working. For more information on setting up goals in Analytics, please click here.

In order to determine which lead source and advertising medium is generating the most amount of clients, you have to use the old fashioned method of asking your clients how they found out about you and tracking their responses in an Excel spreadsheet.

You also need to determine how much each client is costing you. Let's say you spend $1000 on AdWords and it generated 200 leads. That means you are only paying $5 for each lead. You want to keep your cost per lead as low as possible. After figuring out your cost per lead, it is easy to figure out your cost per client. If 2 of those 200 leads turned into clients, that means each client cost you $500. If the total commission generated from these clients was $6000, that means AdWords just made you $5000.

5) Optimize

After testing, you will find your money maker. Now you need to redefine your budget and put more money into it. Let's say AdWords generated the most amount of clients. Then you can take the $1000 that was previously invested into SEO and social media advertising and put an additional $750 into AdWords.

Keep the remaining $250 to test out new forms of marketing. It is very important to continue to allocate part of your monthly marketing budget to testing out new strategies. After all, you never know what your next money maker could be.

To view the original article, visit the WebsiteBox blogWebsiteBox blog.