“Work with a marketing agency? What is this going to cost me?” This is arguably the first question that comes to a business owner or team manager’s mind when considering the expansion of marketing efforts.
The thought process might go something like this: “We’re not bringing in enough opportunities. We’ve got to do a better job of communicating and attracting new business. How much is this going to cost?”
Further complicating the situation, your sales (and therefore bottom-line cash) might be down, limiting what you’re comfortable budgeting for marketing services. Not to mention the creative and web services required to make those efforts engaging for the customers you hope to attract. The thought of “doing it yourself” might come to mind more than once.
Setting a spending limit is important part of budgeting for marketing work – but it is not the first question you should be asking. Starting with restrictive limits on what you’ll invest is the fastest way to experience an initiative that produces no effective results. Your team, very experienced in their knowledge of the products and services you offer, may be lacking in deep marketing experience. This often causes the illusion that some marketing can fill in the gaps. It’s easy to dismiss working with a marketing agency until you start to see the real effort involved.
Where does the confusion about proper marketing budgets emerge?
What often ends up happening in this case is that marketing budgets get pushed to the bottom of the priority pile, leaving room for maybe a brochure, a few online ads or a set of sales slicks. Months later, very little movement in sales volume is found and a collective sigh can be heard from management when working with a marketing agency comes up at the next budget meeting. Someone mentions the website is outdated, a bit of back-and-forth ensues and a begrudging decision to invest more (but only slightly more) in marketing for this budget cycle only is made.
The increased budget must include a website update because “everyone is on the web”, but there are no dollars available for anything else. The internal marketing director (or person in charge of marketing in addition to their current job responsibilities) sets out to find an economical solution for getting your site produced. They might look into a “build your own” solution, and start googling “local web designers”. As proposals start coming in, their eyes widen. How could a website cost so much when DIY builders are so cheap? The proposals range from $1000 to $30,000. Confusion sets in. And for that cost, there’s still no guarantee it’ll be a great website, no less an effective website. An effective website require effective and consistent marketing efforts to produce results.
Eventually all the proposals hit the exec’s desk and their eyes open just as wide when they lay eyes on the numbers. The DIY solution will cost something like $15/mo, though many people dismiss the cost of the personal time it takes someone new to websites to build something effective… often four weeks or more – an average of $3000 to $6000 depending on wages. And that person won’t be performing their normal duties in that time.
This is where working with a really good marketing agency comes in.
Whether you choose to explore working with WMC, or you’re just looking for more information on how to know you’re getting the best deal with your current prospective marketing partners, maybe this will break it down for you. It’s important to know what your goals are before looking at an effective marketing budget, or understanding a right-priced marketing proposal from a company you’re in negotiations with.
Step One: Before looking at the cost, look at the goals.
Starting here will give you perspective that is important for understanding the results you need to produce. Need more leads so your sales team can do better? Great. That means you need to get noticed and become easy to find online. That requires a lot of work – specialized work – that you might not have the real skills and capability to produce in-house. It helps to break down this goal into required consistent actions in order to understand the real time-cost and human effort involved in producing the intended result. Your goal might be something like, “We need to appear first in search results, increase social media engagement by 10% and distribute targeted advertising to 250,000 new eyes who have never been exposed to our brand.” That’s a precise goal, and that’s good. From here we can move onto step two…
Step Two: Break down the goals into consistent efforts that will get you there.
If we take the example goals above, they can be broken down into a reasonable expectation of efforts like so:
- Appear first in search results. You might have heard the term SEO more times than you can count. But do you really know what it is? A great marketing partner will… and it’s not as mysterious as you might think (until you get into some serious competition for results). Chances are, however, that your competitors aren’t doing it to the best of their ability right now either, so you have an opportunity to win here. The required ongoing efforts for gradually building a strong SEO presence might include, for a small business, 3-5 hours per month of keyword and keyphrase research, 2-4 hours revisiting old website posts to apply the right SEO meta settings and content edits, and a reasonable expectation of creating two to four new articles per month that answer the questions your customers are asking (based on the research). That amounts to about 12 to 16 hours of direct human effort per month. In agency terms, that should account for between $1000-3000 per month.
- Increase social media engagement by 10%. This requires you having the right person in place to be a cheerleader, bullhorn-yeller and constant advocate for your brand. Sometimes, you might be lucky enough to have someone inside your walls that does this naturally. Use this, and allow them the time it takes to cheer your company on to the public. Without that person in place, a marketing agency can help you find the right influencer for your brand. That person needs to be passionate and charismatic enough to drive interest in your company and it’s daily activities. For an influencer to create a daily piece, you’re looking at about $3000 per month, for an average of one to two hours per day (travelling to your location, making a post and engaging with respondents). By going weekly (4-5 posts per month) you can cut that down to $400 per month for quick mobile-device-produced photo/video posts and around $1500 for graphic-designed posts on average. The price goes up if you add professional video and the time it takes to edit that video into consumable content pieces. It all depends on your brand – do you need to be really active? The important thing here is consistency.
- Distribute targeted advertising to 250,000 new eyes. This might seem like a big number of new eyes, but assume off the bat that 90% of those people are not going to care. You need to “pay the tollbooth” to access these audiences – that means social media advertising and pay-per-click bidding. In terms of advertising rates, this can run similar to social media costs mentioned above, but with the added cost of advertising, post boosts and keyword bids. Figure the above costs with an average advertising spend of $2000 per month for a total average of $3500 to $6000 in order to make this sort of an impact. It might seem like a lot, but what is the value of 5, 10, 20 or 100 new customers? Probably far in excess of that spend. With a great marketing partner who really believes in your brand and the right due-diligence, you can produce these results, and your sales team will love you for it.
Step Three: Add it all up and start refining the scope. Bring that to your marketing agency and come up with a solid plan and expected monthly cost.
You might notice we mention “monthly” in this article a lot. That’s because you will not reach anyone or remain in their minds unless your marketing is consistent. If you don’t do it, your competitors will and they’ll win all the business that you want for yourself. If you can figure out a spend that works, and make consistent action with an effective marketing team, you’ll see the results. It takes work and dedication like anything else worth having in life. If we take the amounts from Step Two above, here’s what the range looks like:
- Cost for the whole thing, no-holds-barred: Using the above breakdown, we can estimate monthly costs at around $12,000 for massive strides in your marketing efforts. Sound like a lot? How much are five new major contracts worth to your company? Or hundreds of new product sales? If the answer is much more than $12,000 per month, this might be the answer for you.
- Cost for budget-friendly consistent effort: You can always scale back to match your company’s size and growth goals. At the low end of the above mentioned efforts, the monthly cost can be more like $3000 per month. That’s less than the cost of a full-time marketing position to make real progress in your company’s visibility and engagement. With these sort of scaled-back efforts, you might find your sales on a steady up-curve. That can be measured in leads to sales conversions… but that’s for a different article.
- Anywhere in-between: So with the scale of cost between $3000-12,000 representing the lowest-end and highest-end efforts, you can now work with your marketing agency to determine a reasonable cost and a reasonable monthly effort towards developing more leads, more visibility and more exposure for your sales process to take advantage of. That might not be as bad as you were thinking… and once you see the results we can almost guarantee it will be well in excess of your spend.
We hope this helps you understand the costs and benefits of working with a marketing team. If it has, we’d love to talk to you about getting your business the outreach it deserves! If we’re not the right fit for you, we hope this article has helped you understand your current negotiations with your marketing partners.