How much should I spend on marketing is a question among many small business owners. The U.S. Small Business Administration recommends that as a rule, a small business with revenues less than $5 million should allocate 7-8 percent of its revenues to marketing. The industry you are in and stage of growth also impacts your marketing budget, the SBA adds. For example, during early brand-building years, retail businesses spend much more than other businesses on marketing – up to 20 percent of sales.
The figures indicate just how important marketing is to your small business growth. Your choices are to hire someone in house or outsource your marketing to a firm. While there can be advantages to having someone in house who understands your business and goals, there are other factors to consider. First off, you may not have enough work to justify bringing someone on board full time. Also no matter who you hire, no one is an expert at all aspects of marketing. This means you are going to have to bring on some additional professional marketing help.
A marketing firm on the other hand gives you more flexibility with your budget. Plus you get the range of expert services that your program may need – ad copywriting; graphic design of your logo, stationery and collateral; web design, which includes visuals, content and navigation; and social media program management. Even if the firm you choose doesn’t have all these services, it can bring on and manage specialists who do.
Find out the following before you choose a marketing firm
It can take time to find the right firm that understands your vision and goals and has the track record to prove it. Here are suggestions from my own experience about hiring the right outside marketing professionals.
Start by asking yourself who is my target audience, where are they and what do you to achieve from your marketing outreach? Then consider the best channels to reach your targets. Once you’ve answered those questions, find out the following from firms you are considering:
- Are they strategic as well as tactical: Some marketing firms are great at execution, but weak on marketing analysis and strategic planning. If you already know what you want to do, great execution is fine. But if you are looking for program recommendations, make sure to hire a firm that thinks strategically as well.
- Industry specialists versus highly competent generalists: Because a firm has worked with other companies in your industry is no assurance it will succeed on your behalf. In fact, it may be difficult for the firm to effectively position you against the competition. The goal is to hire marketing professionals who understand your challenges and have a track record of succeeding for companies regardless of the market or industry.
- Range of services: Make sure you get the range of services you need. Meet everyone who will be working on your team and ask to see samples of their work.
- Conflict of interest: Find out if the firm works with any other company that competes with your small business directly or indirectly.
- Budget and billing: Regardless of your budget, find out about billing. Is it project or hourly? Ask about the firm’s work for companies with a budget similar to yours and the results.
- Measurement: Ask how the firm measures the success of a campaign. What benchmarks and metrics do the use?
- Reporting: Besides day-to-day communication, what reports can you expect on weekly or monthly to indicate how well the program is meeting objectives?
- Technology: Does the firm use the latest technology? For example, do they use web analytics to help determine the best content and navigation for your website? Do they use cloud based storage and if so how can they assure the security of your documents?
- References: Ask for references even if the firm shows you customer case studies and testimonials. Also inquire among business associates, including those on LinkedIn, to find if anyone has worked with the firm and their level of satisfaction.
Marketing requires teamwork. Whatever firm you bring on board should be as invested in the success of your program as you are.