Do you ever wonder how much money you should spend on your marketing?
Knowing the size of your customer base, how much you want it to grow and where your current customers come from is important to determine your budget.
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.
Pricing is another factor. I think of 3 different types of hair salons I know of: a high end salon where a style easily costs $ 80 - $ 100; a franchise charging $ 20 and a local person with a small shop who does volume work and starts at $ 8 for hair cuts (he does good work, too). The premium salon doesn't do any marketing except for word-of-mouth referrals. The owner even stopped going to a business networking group. The same goes for your design firm.
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. You can use the same type of strategy for your design firm depending on your clientele.
However, if the CPA 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 same goes for your design firm.
The more growth you want in your business in a short amount of time, the more money you will need to spend on marketing.
The money you spend on marketing doesn't have to be much, but it should reflect the overall company goals and objectives.
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 proportionately 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.
One sure way to market yourself effectively whether you spend large amounts of money or not: do a great job in your service or with your products. Your reputation is your best marketing tool.
By Don Simkovich
Photography by Vojtech Vlk