You know you’ve got a great product. Your customers know it’s great, too. But here’s the problem: you don’t have enough customers.
No matter how well-developed your product might be, it’s up against anywhere from one to dozens of established competitors in its niche. Competition is inevitable, but success is not. That’s why you need a marketing strategy that creates connections with potential customers and helps you stand out from the crowd.
There are plenty of great tutorials and how-tos to help businesses develop a top-notch marketing strategy, including EBQ’s B2B Marketing Strategy Framework. These guides can set you on the right track, but in our view, they’re only the first step in a complex process that has to hinge on one crucial consideration: how much is all of this going to cost?
Developing your strategy
It’s not free to develop a strategy, whether you’re doing it on your own or entrusting the job to someone on your marketing team. Any time spent on the process is time that can’t be spent on other aspects of your business, like launching and managing campaigns or handling customer messaging.
You’ll need to consider not only the time it might take you (or your employees) to develop your strategy, but the relative efficiency they’ll be able to bring to the task.
A comprehensive strategy takes time to develop, whether you’re laying out multiple approaches or creating a detailed plan for a single channel. A poorly devised strategy might be worse than none at all, as you may wind up chasing the wrong goals and wasting resources on campaigns that won’t produce good results.
Expect to invest several thousand dollars, in capital, time, intangibles, or a combination of all three, into developing a marketing strategy.
The cost of experience can vary tremendously when talking about marketing. A marketing executive who can execute your strategy can easily cost over $100,000 a year in salary and benefits if you’re after real talent — and you should be. That’s before you consider the costs of finding that talent in the first place.
The cost of turnover at the executive level can be two to three times the employee’s annual salary, and even front-line employees can cost a business 30% of their annual salary to replace. Recruiters often ask for a percentage of the hired candidate’s first-year salary. However, 10% to 20% of an annual salary in recruiting fees is still better than losing 30% to 300% of that person’s salary if they turn out to be a poor fit.
You may want to outsource some of your marketing and lead-generation efforts to a specialized marketing agency. These businesses often charge either on a per-lead basis or on a per-project basis, with some companies (like EBQ) offering to provide what amounts to an entire outsourced marketing department for a negotiated fee.
Whether hiring for an internal role or outsourcing your marketing operations, make sure you’re working with someone with a proven track record. A potential hire should be able to point to past successes and highlight data proving that success, whether they grew an email list by so many people or added a certain number of new leads to the sales pipeline. Modern marketing is a very data-driven job, and this goes for third-party service providers as well as employees. It might work out to hire a recent graduate to an entry-level marketing role, but you probably wouldn’t entrust your entire marketing department’s success to someone who got their diploma last month.
Know what you want from your marketing hires so you don’t end up overpaying. If hiring internally, you can check the salary for comparable roles on any number of salary-data websites, including (if you’re based in the U.S.) the Bureau of Labor Statistics’ Occupational Outlook Handbook. If outsourcing, compare the proposed project or contract costs to the expected lifetime value (LTV) of all new customer acquisitions the service should be able to generate.
Will you need any new software to execute your marketing strategies? If so, what are the options, and what will each cost?
Most marketing software now runs in the cloud, which typically means monthly subscription fees for every employee or user who needs access. Some software has extremely deep functionality and can serve as an all-in-one package solution for your entire marketing department, while others specialize in certain functions, whether it’s providing a CRM to manage leads or helping to automate your funnel’s communications with AI.
Don’t pursue more software than you need, but be mindful of the switching costs you might incur if forced to switch services down the line as you grow. The ROI on your software costs is often measured in operational efficiency. However, some marketing software can help boost your bottom line by simply being more effective at generating leads and helping your sales team close them than any alternatives.
Take your time to assess the options and choose software carefully. Good cloud-based marketing software is scalable and adaptable, but it should also help you effectively target whatever market you need for success. A CRM developed for enterprise-level consultancies may not make sense for a start-up company offering a monthly subscription service priced at $20 per user.
Beyond software, you’ll need to consider costs for any expansion of facilities necessary to execute your strategies, such as rent , hardware costs (servers, networking equipment, computers for your employees, etc.), furniture, and so on. You may not need any of this stuff, but you may need a lot of it. It all depends on how much you expect your company will need to grow in order to execute on your strategies.
Advertising and other paid marketing costs
Word of mouth is a great low-cost way to attract attention from potential customers, but it’s rare that any company grows through word of mouth alone. Most B2B businesses, technology businesses included, will find themselves spending heavily on paid promotions to build a customer base.
This might include paid advertising on Google or Facebook, referral or affiliate programs that pay a portion of revenue generated to the people who brought you that revenue, promotions run through sites such as AppSumo or ProductHunt, and any other effort where you’ll be paying for every new lead and/or client generated. The costs on paid efforts can vary widely, but they’re typically measured in terms of their cost per lead or cost per new customer. If your customer LTV exceeds the cost of acquiring that customer, you’re on the right track. The larger the LTV, the more you may be able to justify spending on acquiring each new customer.
Wrapping it up
Building a business isn’t cheap, and if you’ve crunched your numbers thoroughly, you might find getting to the next level will cost more than you expected. However, a thorough analysis can provide valuable upside beyond simply showing you what it’ll cost to grow.
With your projections in hand, you’ll find it easier to obtain financing, such as angel investments or a business loan, to fund marketing efforts that might have otherwise strained your company’s budget. If you understand the costs and the expected ROI of these efforts, you’ll be in a strong position to select (and repay) funding that’ll be more than offset by your future growth.
Do you want to understand the costs and benefits of your marketing opportunities? Talk to EBQ today