I’ll never forget a prospect agency I spoke with a few months ago. We had gotten on the topic of marketing. I asked this $1.2 million in revenue agency about what they spend on marketing. When they told me they spend a fair amount, I got excited. I love marketing and if they are used to spending some $$$ then we can have some fun with that budget. They then told me they spend about $10k per year and some of it was co-op-ed. I nearly LOLed! My company has been in business for 1 year and I have spent way, way, WAY more than that and I have nowhere near $1.2 mil in revenue.
It made me ask myself, why would an agency think that less than 1% of their annual revenue was a lot and what are growing agencies spending? Well, we can all agree that we would spend $1 to make $1.50, right? If we can get that far, we can use our marketing dollars for good.
I have to say I don’t believe in a set marketing budget with a ton of line items. Sometimes with a great idea you have to strike when the iron is hot. However, you do have to spend actual money and plan a ball park. For most agencies I recommend 10% of revenue. For growing agencies boost that to 15-20% and I do know some agencies spending near 30%. Remember, it’s all about spending money on what works for each agency and this equation is not the same for everyone.
We do recommend spending money in the following areas:
- Thank you cards
- Direct mail for account rounding, lost business and unsold business
- Birthday cards
- A great website that is overhauled every 2 years maximum of 3
- Search Engine Optimization Expert
- Email Marketing
- Good quality in-sourced social media
- Sponsorships (where you are very present)
- High-end Niche Marketing
- A freelance designer that understands you
- Photographer for annual team pictures
High-end niche marketing is something that I am extraordinarily passionate about. I don’t believe in the spray approach. If you have a defined target market that can generate significant revenue, you don’t need hundreds of them, you need 20. Cull a list of targets and start sending them something special, not a brochure, something special. We have created several ideas for many target markets. Call us today so we can get an idea for you!
