Are you trying to figure out how to get the most out of your marketing strategy? If so, then there is a good chance that digital marketing should be the backbone of your advertising strategy in the modern era. Of course, traditional advertising methods still have their place. This could include direct mail marketing, newspaper advertisements, and even radio spots. On the other hand, the vast majority of people are going to use the internet if they’re looking for a product or service they require. Therefore, your advertising budget should be spent in the digital world. At the same time, just how much money should you spend with your inhouse marketing efforts, or with a small business marketing company? There are several factors you should keep in mind. 

What Is the Cost of Customer Acquisition?

First, you need to think about how much money you are spending to acquire a new customer. This is a standard metric that you should know if you are running a company. This number is important because it provides you with guidance regarding whether advertising is going to be expensive or cheap for your company. It will also let you know how many new customers you should expect to acquire based on the amount of money you are spending on your digital marketing strategy. Even though you may not be able to figure out the exact answer to this question until your company is more established, it is something you should think about. 

If you have just started a company, one metric you may want to take a closer look at is the amount of money you are spending for every click on a Google search ad. This number is relatively easy to access through the Keyword Planner through Google. Take a look at your most targeted search keywords. These are keywords that you are most likely to convert. Then, take a look at how much money you are spending per click. If you are not spending that much, this means you can recruit more customers with a relatively small budget. On the other hand, if you are spending a lot of money on every click just to acquire a single customer, you may need to reevaluate your marketing strategy. 

How Much Money Are You Making Per Customer?

Next, you need to take a look at how much money you are generating per customer. This is a popular way of taking a look at advertisement spending because it makes the conversation much more about how much money you are generating on your investment. It can also help you stream on your goals when it comes to customer acquisition. 

For example, if you are not generating a lot of revenue out of every customer, then you may need to find new ways to acquire customers. On the other hand, if you are generating a lot of money off of every customer, then you may be able to spend more money acquiring new customers because you know the average customer is going to spend a lot of money. 

So, how can you figure out the answer to this question? First, take a look at the cost per acquisition. If you run your first campaign, you’ll be able to figure out whether your revenue goal per customer is realistic based on how much money you are spending for every customer. Keep in mind that this number is going to be different for different channels. This will help you figure out which channel is best for your company. 

After this, you will be able to figure out how much money you are making off of every customer. This includes lifetime revenue, which refers to customers who make multiple purchases from your company. Even if your short-term revenue is low, recurring revenue may be high. 

What Is the Percentage of Your Revenue You Are Spending on Marketing?

Finally, you should also take a look at the amount of money you are spending on your digital marketing campaign as a percentage of your total revenue. How much money is your company actually bringing in? How much money are you spending on your digital marketing? This percentage will let you know how much money you should be spending based on the side of your company.

In order to figure out if you are spending too much or too little on your digital marketing strategy, you should take a look at the average in your industry. This percentage is going to vary based on the exact industry in which you are located. For example, if you have a healthcare company, you may not be spending as much money as someone who works in the retail sector. Most companies that grow quickly are going to fall somewhere around the industry average. 

How Much Can You Afford?

Of course, you also want to think about how much money you can actually afford to spend on your digital marketing strategy. You have a lot of overhead expenses. You also do not want to take a significant bite out of your revenue. How can you figure out exactly how much money you should be spending on your digital marketing strategy? It might be helpful to work with trained professionals in this area.

Are You Having Trouble Finding Digital Marketing Professionals that can Work with Your Budget? Contact the Professionals at BizIQ for Personable Service that Considers Your Needs

In the end, there are a lot of factors to consider when you are trying to figure out how much money you should be spending on your digital marketing strategy. That is where we can help you. At BizIQ, we personalize our services to meet the individual needs of our clients. That way, you are only paying for what you use. It would be our honor to work with you as well. If you would like to learn more about how we can help you meet the marketing needs of your business, please give us a call today!