Unlock Growth: How Much Should You Spend on Marketing? | 3 Min Marketer
Marketing costs money, y'all, but how much
should you be spending on your marketing? In today's 3 Minute Marketer, we're
going to talk about how much people, on average, spend on their marketing
versus how much they should be spending on their marketing. [Intro Music] A recent article in WealthManagement.com
explored what firms, on average, are spending on their marketing. Now,
benchmarks tell us that, on average, a firm should be spending about 5% of their
annual revenue. What does that mean for a firm that has about a billion dollars under
management? We're assuming that a firm with a billion dollars under management has about
$12 million in revenue. With this in mind, we're seeing, on average, firms are spending
about 1.4% on their marketing. This equates to about $177,000 per year, not including
what they compensate marketing employees.
And while this figure may seem high to you, it
doesn't come close to what best practices tell us should be spent on marketing and growth. Industry
benchmarks are telling us that firms should be spending about 5% per year of their annual
revenue on marketing and growth initiatives. Now, for a firm that has about a billion dollars
under management with approximately $12 million in revenue, this is going to come
out to about $633,000 per year on marketing.
These are very rough numbers, but this gives
you an idea of what you should be spending or what you should even come close to
spending per year on your marketing initiatives. We do see that there is a direct
correlation between firms who are growing and spending an appropriate amount on their
marketing versus firms who do not. Now, $600,000 may seem like a lot, and it is, but
we don't think that just throwing money out the window is a solution. There needs to be
a strategic approach with your marketing spend. So, where do we see the most
effective marketing strategies for your money? We're going to give you four: The first is good content.
Now, we've talked about this before, but good content is relevant, timely, and
interesting to your ideal client profile. Next is good public relations. A placement in a
top-tier publication can yield excellent results for business development.
Public relations, over time, give both credibility, brand building,
and an expanded footprint to a firm. Thirdly, small intimate events. These are an
excellent strategy for growth. In fact, this is one of the only marketing tactics
where we see a direct correlation for new business converting into
a client and a marketing spend. And fourth, excellent branding. Branding can
help your firm stand out both visually and intellectually from your competition. So, are you spending enough on your
marketing? Are you being strategic enough with your marketing? If you have
any questions about what you're spending on marketing or any of your existing marketing
tactics, please don't hesitate—give us a call. [Closing Music].
