If you are just starting your business and your next step is setting up a marketing strategy, you will face budget restrictions. At first, you won’t be able to afford to experiment too much with your marketing campaigns. So, it is very important to know how to spend the marketing budget for startup optimally.
In companies with a marketing department, this job will be entrusted to a marketing specialist, but if you own a small startup, you will be responsible for testing marketing campaigns. So here are a few questions you will need to answer to be able to start a successful marketing campaign:
- Have you defined the right audience?
- Which keywords should you be targeting in Google Ads?
- How quality leads do you generate?
- What pages are making the most conversions?
- How much bot traffic are you attracting?
Of course, you will be faced with some unsuccessful campaigns along the way, and that is the reality of business. But you need to ensure that you don’t repeatedly make the same mistakes because that will deplete your marketing budget for startup.
You always must be aware of which campaigns perform better and allocate resources to them to generate more sales. That will further increase your marketing budget, which can later be used for starting new campaigns.
Starting a successful marketing campaign requires careful planning and execution, you cannot base your work on the “hunch”. You, or the person you employ, need to possess digital skills that will allow you to analyze the metrics data you collect from your campaigns. The most important metrics include engagement, leads generated, and sales, and that data you will use to make adjustments to your campaigns and make them successful.
Here are three steps you can take to ensure decisions about your marketing budget for startup are based on reliable data.
Tip 1: Find a way to experiment effectively
The fact is that new businesses must experiment; it is at the core of their existence. But if you cannot collect and analyze data properly, the purpose of the experiment is lost. Only if you can measure results accurately you will gain something from experimentation.
To be able to measure the data you got from the experiment effectively you need to:
- Define what it means for a campaign to be successful.
- Monitor website traffic and measure engagement.
- Calculate your return on investment (ROI) to determine whether your campaign is profitable.
- (bonus tip): Conduct surveys to gather feedback from the target audience and use that data to adjust your marketing strategy
It is important to know just because a marketing campaign generates conversions doesn’t mean it is working well. The conversions you need are from qualified leads you are expecting to make sales. If you have a lot of bot or spammy leads, you will not generate satisfying income.
Quality leads are potential customers who are likely to have an interest in your product or service and have a higher likelihood of converting into paying customers. They have already shown an interest in your brand and think you have a product or service that can solve their problem.
This problem-solving pitch is your main selling point. Keep that in mind when selecting your target audience.
Tip 2: Recognize the metric that brings you gains
It is of the utmost importance to determine which metrics help you recognize which campaigns work and are worth allocating resources to. Some of the metrics can be defined as “hollow”, meaning the signals you get from them don’t have any impact on your company’s revenue.
Hollow metrics are those that do not accurately measure the success of a marketing campaign. These metrics can be misleading and result in a false sense of success or failure.
For example, if you use the number of social media followers as a sign of campaign success, you can get misleading results. It is highly possible that you have a lot of users without engagement that don’t make any purchases. This is one of the most common hollow metrics you can find in the marketing world.
Also, conversions can be an example of hollow metric, if you don’t track all the conversion channels. Some campaigns can be shut down because marketers only traced conversions got from filling online forms, sending emails, or live chat interactions, while phone calls are excluded. But what if you had a large number of phone calls? Then you probably canceled a successful campaign and made the mistake.
Keep in mind, even if you can track every type of conversion, the metric might still be hollow. To have a valuable metric, you need qualified leads. People who contact you with sales pitches or need help or some unbound queries don’t mean anything to your marketing strategy. You can work only with real and quality leads.
Quality leads are important because they are more likely to become paying customers and provide positive reviews and referrals. So, even if your marketing campaign is generating lots of conversions, you need to filter out bad leads to be able to track which of your campaigns are working well and which ones don’t.
After you filter out poor-quality leads, you can focus on the sales value potential for your best leads.
Tip 3: Use a value of leads to determine marketing ROI
The final step when you are creating a marketing budget for startup is to assign potential value to qualified leads. This metric is important to evaluate whether the campaign is worth the investment or if you need to allocate your marketing budget to new ones.
Assigning a potential value to qualified leads can help businesses prioritize and focus their efforts on leads that are most likely to convert into paying customers. That way, you can conclude how much revenue the company is potentially earning from each marketing campaign.
If you do not know how to assign value to qualify leads, here are the steps to do that easily:
- Develop a buyer persona that represents your ideal customer
- Determine the level of engagement (quality leads have higher engagement levels)
- Analyze the lead source
- Compare the value of the lead to the costs of the campaign
By implementing these steps into your marketing planning, you will have an overview of marketing campaign success. You will be able to compare how much money you gained for every dollar or pound spent on generating the lead for your marketing campaign.
The sooner you identify which marketing channels deliver your most valuable leads, the sooner you can reinvest in those campaigns and stop wasting your marketing budget for startups on campaigns that aren’t profitable.
The marketing budget for startup: recap
To summarize what we told you above:
- You have to be able to track every type of conversion.
- You need to collect enough information about every lead to know if it is a quality one.
- You need to have cost per acquisition (CPA) for your new customers.
- You need to know customer lifetime value (CLTV) which measures the total value a customer will bring to your business over their lifetime.
All those information is needed for you to know your ROI and properly determine the marketing budget for startup.
By knowing the ROI of each campaign, you will be able to market your budget that way that it is assigned to successful campaigns.
Following these three steps, which we described in our article, will significantly ease those tasks.