Spend Wisely: Realistic Marketing Dollars

Avoiding a case of “sticker shock.”
As a marketing consultant, many times I work with businesses that are new to marketing. Invariably, I need to prepare them for a strong case of “sticker shock.” A fair part of my initial consulting work is in educating clients as to the real cost of doing marketing if they truly want to achieve the results they seek. Often the client may need to rethink their business goals to one that best fits their marketing budget. One of my most important responsibilities is to ensure clients know exactly what they can get for how much.

Get your budget in place before you start marketing.
Developing a realistic budget before one begins marketing is a critical factor of marketing success. Too often a company will dive right into marketing efforts, and realize too late it did not adequately plan to have the financial resources available to sustain success.

Know the costs associated with your marketplace.
One of the things that drive costs is location. Here, outside of New York City, we are easily overwhelmed by one of the world’s largest media centers. For example, WCBS-AM radio effectively reaches a very large business audience. But if your market is located primarily in Fairfield County, CT, you’ll be paying a lot of money to reach only a sliver of WCBS’s audience. Many business owners are surprised at the cost of advertising to reach their demographic and geographic markets, but are still unwilling to budget appropriately. This is like trying to fly across the Atlantic on a half tank of fuel. Sure you’ll make progress, but you won’t reach your destination. This is a recurring theme with educating clients as to the return-on-investment to their marketing dollars, but one that must be overcome if their business is to prosper.

Don’t worry about spending too much, worry about spending too little.
Recently, I was retained by an established, $6 million business in the document management industry. We create a five-year marketing plan with the goal to grow the business to $20 million in sales. I established an initial marketing budget of $65,000, which represented just 1% of gross sales. Sensitive to the fact they had not done much marketing prior, I felt confident we could do an effective job promoting their business with this budget amount. The program included advertising, direct mail, website development, and a PR campaign, and specifically detailed where every dollar was allocated.

Surprisingly, the owner thought it was much too expensive and could not justify such an expenditure on marketing.

When a $6 million company resists allocating 1% of gross sales for marketing, a major disconnect exists between what marketing actually costs and what clients think it should cost. And that’s a problem. It is impossible to grow a $6 million company to $20 million with a minuscule marketing budget.

Have you ever been in such a situation? You expect something to cost a certain amount, but it costs much more. You’re frustrated, the client’s frustrated, but there are expenses to make marketing happen; it doesn’t happen in a vacuum and it doesn’t happen all by itself.


  1. Pingback: 7 Marketing Blunders that Cause Companies to Collapse

  2. Rocky Cipriano on February 14, 2010 at 7:25 PM said:

    Thanks Paula –
    Yes, there is one specific client that sparked this post, but for the sake of discretion, they shall remain nameless. There are so many factors that come into play when developing a realistic marketing budget. Is the company marketing to consumers or other businesses? Usually consumer marketing requires a larger budget. Is the company marketing a service or a product? If a product or products, are they the manufacturer or a reseller? What are the margins involved? How competitive is the marketplace? All these factors have an impact on determining the amount of money needed to successfully market their business.
    Marketing without an adequate budget is like trying to fly across the Atlantic with half a tank of fuel. Sure you’ll make progress, but you won’t reach your objective.

  3. Paula Williams on February 9, 2010 at 10:38 PM said:

    Hi Rocco-

    Excellent article – I’m sure there’s a story here – a discussion with a client or potential client that inspired you to write it. I’ve had several of those discussions!

    You might share marketing margins of other industries with your clients whey they have sticker shock. The marketing margins in food & beverages, clothing, etc. might put it in perspective for them.

    Blue skies,


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