If you’ve read our previous blogs in this series, you know a little bit about what to look for when finding the right marketing agency partner, and you may have even started your relationship with one already. Or, you may be in the state that many small businesses find themselves in at this point and asking yourself – OK, how much should I be spending on my marketing efforts, and is the amount I’m being quoted really worth it?
Let’s Talk Cost!
We all have that friend who got her website done by “some guy” and she paid an enviable $500 for it. The same holds true for other items like a logo. There’s always somebody on the side who may charge you a couple of hundred bucks for a “custom” logo. But what exactly are you getting? In these cases, you are getting cookie-cutter products that look like everybody else’s. You may end up with a website that’s perfectly functional – but is it intentional? Will it speak to your target audience and will it get them to convert/act? At 1558 Brand Agency, we strive to be intentional in everything we do. We do not believe in cookie-cutter approaches, and instead, we aim to be strategic in all our designs, deliverables, and campaigns.
That brings us to our first point. Why does marketing cost what it costs? Simply put, it’s because there are huge variances in quality, and you get what you pay for. If you cut corners from the outset, and try to save on things like websites, logos, and other elements that make up your brand identity and foundation, then it is going to be more difficult down the road to get your target audience to engage. Additionally, over time you’ll likely end up dissatisfied with the quality, look, and feel of your elements and have to either rebrand completely or upgrade piece by piece.
You might say, well, I don’t have enough in my budget to do all these elaborate things. And that’s totally OK! You don’t have to do everything. In fact, the best marketing partnerships are the ones that are just that – partnerships. You have obvious expertise on your own team that nobody else has. Leverage that expertise for certain things in your campaign, and let your agency partner handle the rest.
For instance, maybe you have a staff member with downtime during the day that can handle all your social media communication. That’s great! Or, maybe you have a skilled writer on your team that can handle your bi-weekly marketing emails to your database of clients. That’s also an excellent reality. Figure out what your capabilities are in-house, then utilize your agency partner to fill in the gaps.
The other thing to note when you’re looking at an overall budget is that marketing takes time. Time is needed to figure out your target audience, to assess their needs, to see how your offerings/products/services align with their needs, and so on. Time is also needed to figure out where to market and on which platforms. Remember, you never want to have potential clients come to you. You need to go to them – i.e. market where they already are, whether that’s on Facebook, television, Google, etc.
When partnering with an agency, you’ll likely be presented with one of a few different types of agreements. The first one is a project agreement. This is where you pay someone to execute a specific project or campaign, usually over a short period of time. Maybe you have a large Labor Day/End of Summer promotion and you want to spend July and August getting the word out to as many people as possible. This project agreement will entail certain deliverables, and it will be executed over a specific timeframe, for an agreed-upon amount. When the project is completed, you go your separate ways, and maybe contact them again at another point in the future if you had a positive experience.
The second type of agreement you may be presented with is a retainer agreement. This is the type of agreement we prefer with our clients because it gives us a chance to truly partner with the business. A retainer agreement usually spans 12 months and is more of an overarching and all-encompassing agreement that focuses on your marketing objectives and goals for that specific period of time. One of the reasons this agreement is advantageous is again because of the time element. Because it takes time to learn the behaviors of your target audience, this type of agreement gives us the flexibility to assess, adapt, and move forward.
Ideally, your marketing agency partner has spent a lot of time figuring out their rates. At 1558 Brand Agency, we are a boutique marketing firm, that puts intention and a personalized focus behind everything we do. However, our rates are very competitive. While we don’t aim or claim to be the “cheapest,” we do position our rates lower than larger, Dallas-based marketing firms because we want to be able to service and help every size business. We want to help that small mom and pop, local shop, just as we want to help the non-profits and even the large enterprise corporations. Other marketing firms may charge a flat rate. Or they may have a sliding scale based on who is working on your account. For instance, having the CEO handle your marketing might cost more than having an account executive on the job. Other times, they may give you a flat-fee quote based on a particular project that includes certain deliverables.
Now, let’s look at the budget. One of the questions we often hear is – how much should I be putting towards my marketing? While there is no one-size-fits-all approach when it comes to marketing, we generally recommend that if you’re in the “growth” stage, and you’re building your brand, then 8-10% of your total annual revenue should be spent on marketing. If you’re in the “maintain” mode, then you can scale back a bit and maybe devote 6-8% of your annual revenue to marketing.
Keep in mind, however, your total budget doesn’t just include what you pay your marketing firm. There are direct costs in there as well, depending on the platforms you choose. For instance, you may need to devote $300 per month to your Google Pay per Click ads, or there may be a large, up-front printing and postage fee for any direct mail campaign you use. Be sure you allot for those costs as well in your total budget.
The big takeaway here should be that – while there is no set number for what one should spend on their marketing efforts, marketing is an investment. That investment, if executed properly, should pay for itself in the end. Just remember, time, patience, and a great marketing agency partner make the journey a lot easier!
Be sure to check out our previous blogs in this series:
Reaching Your Goals with the Right Marketing Partner – The top reasons you may need to outsource your marketing needs.
Finding the Perfect Match for your Business – How to choose the right marketing agency partner and where to find one.
Narrowing Down the Search – Other factors to consider when searching for the perfect marketing agency.
Setting Expectations & Determining Goals – How to best achieve your desired results with your marketing agency partner.