Digital marketing – How to start and how to determine a marketing budget?

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The good news is that getting started with digital marketing is pretty easy. A marketing agency will guide you through the process. They will help you choose the best marketing strategy for your business. Here are a few strategies that are available to you: Google Ads , SEO for your website, social media marketing , content marketing , email marketing .

Regardless of which strategy you choose, you need to answer these three questions before you start digital marketing:
1. What goal do you want to achieve?
2. Who is your target audience?
3. What marketing budget should you set?

What goal do you want to achieve?
What do you want to achieve? To understand how much you should spend on digital marketing, you first need to clarify what your goals are. The way you approach digital marketing can vary quite a bit depending on whether your ultimate goal is to increase sales or increase brand awareness.

Who is your target group?
Once you know what goal you want to achieve, you whatsapp germany number need to identify your target customers . This is crucial, as different categories of customers require different marketing strategies .
If you have a sales team, ask them what your customer profile is. You should know roughly who your customers are, how old they are, what topics they are interested in, their level of education, where they work, etc.
Digital Marketing offers you excellent targeting options and the more you know about your customers, the more likely you are to reach them with your marketing activities.

How to determine the marketing budget?
It is believed that you should allocate 5 – 20% of your annual revenue for marketing . You can define
your marketing budget as a certain percentage of your total revenue:
• New businesses (1-5 years): 12 – 20% of revenue,
• Established businesses (over 5 years): 5 – 12% of revenue.

An established company that has been in business for a number of years has established clients and a recognizable brand, which is why their revenues are higher and the percentage spent on marketing is lower.
B2C companies spend approximately 10% more on marketing than B2B companies .

You should never spend more on marketing than your customer is worth.

Example:

Let's take for example a B2B company that charges a client 5,000 kuna per month for its services.
Let's assume that the average customer retention in this company is 5 years. That is, that clients use the services of this company for 5 years.
In this case, the value of this customer would be 300,000 kuna:

60 months x 5,000 kn = 300,000 kn.
Let's assume that 80% of that amount (240,000 kn) goes to business expenses and taxes.

Let's now calculate the profit:
Revenue – costs = profit / earnings
300,000 – 240,000 = 60,000 kn
This would mean that this company earns 60,000 kn from one customer in 5 years.
If the company in this example keeps its customer acquisition costs below this threshold, it will make a profit. If it costs more to attract a new customer, it will lose.

Let's assume that the allowable cost of acquiring a new customer is 5% of total revenue.
60,000 x 5% = 3,000 kn.
In this calculation, this would mean that you would have to spend 3,000 kn to acquire a new customer.
For the 3,000 kn invested, the company will earn 60,000 kn.

You don't have to use this calculation to estimate your marketing budget, but in any case, it's much better to make such a calculation than to randomly estimate and hope that digital marketing will give you the results you need.