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Invest early in brand strategy.
Relative to the costs associated with things like product development, talent acquisition and marketing, investing in a concise and compelling brand strategy costs very little in the grand scheme of growing your business and building equity in your startup brand.
With 30 years of experience working with small businesses we’ve seen too many start out with what they can afford, rather than what they really need to succeed. The fact is, 15% of new startups fail in year one, while 50% won’t see the end of year five. And the main reason is that they’re were unwilling to properly budget for marketing activity.
Are you ready hire a brand agency?
If your small-business (B2B and B2C) has 6 or more employees, or over $1 million in sales, or a funded start-up – typically you’re ready to hire an agency to help market your business. If you have a medium-sized business, you’ve obviously been partnering with agencies for a while.
Branding elements that are worth the investment:
- Research and analysis
- Brand strategy
- Designing your brand (Identity, website, and marketing materials)
- Marketing (Lead generation, nurturing, and conversion)
- Maintaining and upgrading your website and brand experience
- ROI Analytics
Many branding projects range from $5-15K depending on the amount of work needed (yes we can still help with more modest budgets). Website development can run between $5K for a basic site to $25K or more for a site that integrates e-commerce and marketing automation. And creating a single video can also add several thousand dollars onto a project.
So what should you budget for growth?
The amount your business should budget for brand development varies based on where your brand currently stands, and where you’d want it to go. Marketing spend also depends on how much and how quickly you want to grow.
Other considerations including industry and number of products also effect budget. For example, industrial, B2B corporations may spend between 1 and 2 percent of their net revenue (total sales) on marketing established products, yet companies in highly competitive industries such as retail, consumer products, and pharmaceuticals will often spend between 20 to 50 percent of their net revenue on marketing.
Rules of Thumb
As a general rule of thumb, you should spend 5 percent, or so, of your total revenue on marketing to maintain your current position. If you’re looking to grow you should consider budgeting closer to 10 percent.
These rules of thumb are based on businesses that average at least six-figure revenue. If your company has smaller margins you should allocate a percentage of your net revenue based on your best guesstimates of what your competitors are spending.
So how much can you expect to receive in return for your marketing investment?
Fair question. Unfortunately, there’s no easy answer. Some marketing tactics require a longer term than others to see an effective return. For example, if your marketing strategy is focused on branding you’ll need a longer period to measure results than with a lead-generation strategy.
Typically, most marketing activity snowballs over time. Return increase exponentially the longer the tactics are employed when using a coordinated, integrated strategy.
At Mystique our expectation is to deliver a return of 220% to 280% across multiple tactics – while tracking measures on individual tactics and eliminating poor performers to double down on the winners.
Feel free to discuss all your options with us. We are here to help.