In the realm of staffing, the kiss of death is a failure to adequately invest in your marketing. Gone are the days of relying on referrals to take you to the next level of your business. Today, with over 25,000 firms in the USA vying for a decreasing number of prospects, attracting clients and candidates is more difficult than ever.
Marketing is the art of making people aware of your business. If people don’t know your business, they can never engage with you. If people know who your competitors are, they will engage with them. The return on investment in properly executed marketing campaigns is business growth. As a result, marketing should not be looked at as an expense but as an investment in being introduced to new prospects. And over time, if your competitors are willing to invest more than you to find new clients and candidates, they’ll eventually begin to eat your lunch!
Your marketing budget is comprised of all of the money you choose to invest in advertising, job boards, events, agencies and software with the intention of promoting your business to the market. While there are a vast number of marketing channels you can use to allocate your dollars, not having a budget will cause you to haphazardly spend and lead to marketing that doesn’t produce results, while having too small of a budget will drastically reduce the level of impact you’re able to have across your ideal channels. Selecting the right channels to invest in is one thing, but before you get there you have to have an understanding of how much you should invest to being with. Here are three strategies to help you decide how much money to dedicate to your marketing:
Follow the General Rules of Thumb
One school of thought suggests that your marketing budget is a percentage of your overall revenue. The 5% rule suggests that you spend about 5% of your revenues, but on the other hand, the US Small Business Administration suggests that businesses with less than $5 million in revenue invest 7 % to 8% of their revenues in marketing. While these metrics provide a perfect benchmark, they only consider what it costs to maintain your visibility and brand awareness and disregard the costs to grow your market share.
Use Your Industry as a Benchmark
The industry that you’re in is almost a major determinant in how much you should spend on marketing. When examining the latest CMO report by Deloitte, of the over 2,500 sampled marketing professionals, marketing budgets across industries sit at an average of 10.4% of revenue. Diving deeper into the industry, B2B services companies invest 10%, while B2C services companies invest approximately 8.7% of revenue. While these statistics represent a benchmark, staffing firms across IT staffing, industrial and healthcare all have different considerations and costs of marketing projects.
Invest Based on the Direction of Your Business
The last consideration does not follow any sort of benchmark or rule of thumb but takes into account where your business is today and where you want it to be tomorrow. By understanding where your industry is within a life cycle (introduction, growth, maturity or decline), where you currently stand in the market (are you new or established), and how much you intend on growing the business, you can make a budget that is tailored specifically to your business.
Regardless of where you stand as a business, companies shouldn’t be afraid to invest in their own marketing strategies in the right ways. Whether you want to rise to the top as an industry leader or simply maintain your current market share, marketing will help you avoid il bacio della morte.