Why a percentage rather than a dollar figure?

Marketing is often a cornerstone in any lead generation or sales strategy, and in many cases, the size of an organisation directly correlates with the number of leads or sales needed to turn a profit. By looking at your marketing budget through a percentage lens rather than a total dollar figure, you can ensure that you’re continuously spending the right amount to hit your targets. 

And the average percentage is…

• In February 2021, Deloitte’s CMO Survey reported that marketing budgets were approximately 13.2% of total company revenue.
• Similarly, Gartner’s 2020 CMO Survey found that marketing budgets were around 11% of total company revenue (fluctuating between 10% and 12% between 2014 and 2020).
• The Deloitte CMO Survey 2021 also found that:
  • B2B product companies had the lowest marketing spend as a percentage of their overall revenue at 10.0%, while B2C product companies had the highest at 18.6%.
  • B2B service companies were investing 15.5% of their revenue into marketing, while this was 10.1% for B2C service companies. 
  • Not all industries had the same spending patterns. For example, education significantly outspent other industries, with marketing representing 19.4% of total budget.

The main takeaways from these surveys show that most businesses typically spend on average 10-13% of their revenue on marketing. However, averages can be dangerous if you don’t understand the data behind them. What data range is being used? Are most companies spending 10%, or is there a range from 5% to 15%?

It’s important not to rely on aggregated data to inform your organisation’s future sales and marketing budgets. 

When is a standard range not a good guide for me?

While taking guidance from industry surveys can be helpful in some instances, there are times when the industry average spend will not apply to your business. For example:

• High-growth companies, by definition, generate more leads and sales than their smaller counterparts. This rapid growth is sometimes achieved by investing more heavily in marketing. 
• If you come from a competitive industry, your marketing spend is likely to be higher than the average. If many companies in your industry invest well in marketing, you’ll need to be smart to succeed. 
• Start-ups often attribute a much higher percentage of their revenue towards marketing to offset an unproven offering.
• If you are expanding your business into an area or market, you’ll likely need to invest more of your revenue into marketing. 
• During challenging times (like the global pandemic we are currently living in), companies have the opportunity to invest in marketing to help grow their market share so they can reap the benefits when good times return. 

How to easily increase or decrease your marketing budget

An in-house marketing team is an invaluable and effective resource that can help you get the best possible return from your marketing investment. However, if you don’t have the capacity to bring your marketing under one roof, an external agency can help your business to quickly adjust their marketing investment as revenue changes. 

Why the size of your marketing spend matters

Marketing has the power to shape what the future of your business will look like. Today’s marketing is tomorrow’s revenue, and the size of your marketing spend will noticeably drive your business outcomes. Notable examples of marketing affecting business growth are:

• Apple, whose expensive product isn’t radically different from their competitors, but is still priced significantly higher;
• Amazon, whose continued growth has helped them dominate global markets across industries, and;
• Red Bull, who have aligned themselves with certain extreme sport events and have experienced tremendous growth as a result. 

None of these companies follow the industry average for their marketing efforts. By creating above-average demand for their product, they were able to harness this to achieve huge business growth and incredible outcomes. 

What will your business look like if your marketing capability creates more leads and sales than you need to hit your projected targets? Do you grow rapidly? Raise your costs? Focus on your ideal customers? Invest in the future? 

Conversely, what will happen if you under-invest in marketing compared to your competitors? How would having fewer leads or sales than you need to achieve your goals affect your business?

This article originally appeared on Rocket Agency‘s website, and has been paraphrased here with permission. For the full article, click here.

David Lawrence is the co-founder and MD of multi-award winning Australian digital marketing agency, Rocket. Rocket was recently awarded Best Digital Services at the 2020 B&T Awards and Best Integrated Small Agency at the 2021 APAC Search Awards. David is also author of the Amazon Australia best-selling marketing book, Smarter Marketer. Smarter Marketer was inspired by David’s 20-year digital marketing career working with over 300 Australian businesses as well as growing three of his own.

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Yes, we didn’t see this coming. “Unprecedented” is this year’s overused word of the year.

A pandemic that would stop the world in its tracks and leave businesses and communities scrambling to survive. For those who can or will survive, tough decisions around reducing expenses have had to be made.

Business leaders worldwide have been ruthlessly slashing resources deemed non-essential, at least for the short term: the office plants, the well-stocked bar fridge, the admin support staff, the marketing team, the….

Wait, what? Marketing?!

During tough times, there has always been a tendency for businesses to question the value of marketing.

“What ROI do we get from marketing? Does it really work? Why don’t we have more engagement, followers, leads, etc? Why has competitor X got more Y than us? Our website needs to be more this, our brand needs to be more that. Why? Why not?“

It’s only natural, and reasonable, for questions to be asked when businesses are concerned about the future.

Getting ‘left behind’ is a fear of most businesses, no matter their size.

[Recruiters] are using this quieter period to audit elements of their marketing ecosystem. If you ask me, now is actually the perfect time assess and audit your marketing systems to ensure you don’t get left behind when the current situation changes.

Right now, it’s not business as usual when it comes to marketing. Several of my clients are in recruitment and well, less jobs in the market, means less jobs listed. It’s a tough time for most recruiters.

Several are using this quieter period to audit elements of their marketing ecosystem. If you ask me, now is actually the perfect time assess and audit your marketing systems to ensure you don’t get left behind when the current situation changes.

Here’s 4 things you should consider:

1: Review your marketing tech stack

Start by taking a look at what you know isn’t working.

What’s causing roadblocks? What are you doing that could be automated, if you just took the time to stop and analyse it? Are you spending on tech systems that aren’t delivering optimal returns? Are you even using your systems to their full capacity, and if not, why? Do your systems integrate?

How proactive are your current tech suppliers in supporting you to ensure you are fully trained and maximising use of their software? Are your tech suppliers innovating in line with industry needs? Is it time for a change – or, is it time to have some frank discussions with your suppliers?

Are you achieving what you need to, and if not, do you have the right systems in place to enable this?

A quieter period of time is the perfect opportunity to reflect on these questions and undertake a full tech stack review.

You can do this with a skilled internal marketer or by engaging an external consultant (let’s face it, sometimes you don’t know what you don’t know, right?!)

Expect to gain insights and recommendations that deliver outcomes that saves you money, time and resources. Not only this, but recommendations stemming from a review will be geared to optimise leads, marketing and sales effectiveness, provide greater business transparency for internal and external stakeholders and ensure data fluidity and accuracy.

2: Conduct a website audit

Your website is a point of validation for customer prospects. When was the last time you conducted a full analysis of your website?

First and foremost, is the content a true reflection of where your business is at today? Is it SEO optimised? What even are your SEO keywords? What CTA buttons are you using and where are they positioned? Broken links? Backlinks? The list goes on.

Websites are too often something businesses set and forget. The website is up. Great! Crossed off the list and on to the next thing. Right?

Wrong!

Your website should always be on someone’s to do list. Your website is something you should constantly be updating with fresh, valuable and optimised content if you want to show up organically in online search.

Use data analytics platforms and tools to help you assess what content and pages are getting the most traction on your website, and to help guide you with clues on how to improve your site.

3: Audit your social media channels and groups

Again, this is something that businesses and their staff often set and forget. Sure, you may be posting new content regularly, but when was the last time you analysed your social media channels?

Are you using the appropriate channels and groups to reach your target audience? What level of engagement are you getting from these channels, and why? Is this engagement feeding your sales pipeline?

How do your company and staff bios read? Are contact details up to date? You’ll be surprised by how many company employees still have their past employer website and contact details listed!

Do profiles reflect your brand personality – or are they full of corporate speak? Do they reflect your brand pillars, your EVP, your brand values? Assuming you have developed those?

Your business’ and your team’s social media profiles provide social proof for current and potential customers. So make sure you invest the time into getting this right as social channels are often the gateway for new business.

4. Upskill your staff in marketing

When your team are aware of your marketing strategy, what outcomes you are striving to achieve, the role they play in achieving those outcomes, and are provided with adequate training, you’ll have the whole choir singing from the same hymn book, so to speak.

The most successful brands I have worked with invest in building brand ambassadors; training or coaching staff on how to market themselves as an extension of the corporate brand, whether that’s having an internal marketing professional deliver training or having an external marketing consultant facilitate.

Empowering your team to share their voice as a representative of the brand will deliver powerful results. Think about the service brands you engage with. When you engage with those brands online, is it mostly through a human contact at that business, or directly with the business brand. I’m guessing, for the most part, it’s a contact at that business.

Fact: People buy from those they KNOW, TRUST and LIKE.

Your customers have a relationship first and foremost with someone who works in your business. Allow them be the trusted voice. But first, make sure you support them with guidance on how to execute the brand message, and empower them do deliver this uniquely and authentically.

Reviewing your tech stack, auditing your website and social channels, and providing marketing training to staff all requires an investment of time and resources. Time and resources that businesses don’t always have, or simply don’t always prioritise. But should your business have some extra time on hand, why not use this ‘downtime’ to up your marketing game.

You’ll thank yourself later.

If you are a small business or startup needing assistance with any of the above, we can help! Please reach out to Jeannette Borg at Your Virtual CMO via email: hello@yourvirtualcmo.com.au.

Jeannette Borg is the Founder of Your Virtual CMO; an on-demand marketing and branding consultancy for small to medium businesses in Australia.

Over the last 20 years Jeannette has worked extensively in the recruitment sector; with recruitment agency startups through to multi-nationals, and with in-house recruitment and talent acquisition professionals to develop and deliver marketing strategy.

With experience in marketing across mainstream media campaigns through to digital marketing campaigns across industry sectors including Recruitment, HR, Tech, Healthcare, Management Consulting, Events, Hospitality and Gaming.

Working with Recruiters is her sweet spot; collaborating with highly driven entrepreneurs and founders to amplify their brands, and bring them to life! 

Connect with Jeannette Borg on LinkedIn here.

Follow Your Virtual CMO on LinkedIn here.

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One of the most common questions we’ve heard being asked in HR departments about unfilled positions is: “how many applications did we get?” The assumption here is that the more applications you received, the better. After all, the more candidates you have to choose from, the more likely you are to find someone who will make a great addition to your existing team. At the same time, not all candidates are created equal. It doesn’t matter how many job applications you received if none of the applicants are high-quality.

We probably won’t go so far as to say that your total number of applicants is completely irrelevant—the law of averages does work in your favour if you have a large influx of candidates—but it’s not nearly as important as many people think. Why? Because a job is not a fast-moving consumer good.

Jobs don’t fly off the shelves

Say you’re walking down a street in your city or town’s downtown area. You notice that the grocery store is advertising a sale on your favourite cereal brand. This is a no-brainer: you go in and grab a few boxes, knowing that you’ll save a little bit of money in the long run. Later on in your walk you see a sign for an open house. The place has been on the market for months, so they’ve lowered the house’s asking price by a huge percentage. This is another moment where you could save a lot of money in the long run—but how many of you are going to walk into the open house and put down an offer, just because you notice that it’s a good deal? I’m guessing not very many of you, and with good reason. Buying a house is a huge commitment, and it’s not the kind of decision to take lightly. You need to take a careful look at your finances, your long-term goals, and a host of other factors before making a decision.

When you think about it, it should be pretty obvious that taking a new job at a new organisation is a lot more like buying a house than buying a few boxes of cereal. While it’s true that most passive job seekers (a group that comprises 80% of the talent market at any given time) would be willing to change jobs for a position at the right company, that doesn’t mean that they’re going to do so lightly. Quite the opposite: they’re going to treat the decision to change jobs like the decision to buy a house—because both of them potentially concern huge sums of money and a big change in day-to-day life. Thus, when recruiters expect people to make snap decisions about their place of employment (i.e. when they treat jobs like FMCGs), they’re simply not being realistic.

Attracting the right applicants

Because changing jobs is more like buying a house than a box of cereal, it stands to reason that recruiters should care much more about quality than volume when it comes to applicants. This is one of the reasons (though certainly not the only one) that job boards are becoming less effective for talent acquisition in modern hiring processes. You might catch the attention of a lot of active job seekers, but since they’re not guaranteed to have any familiarity with your brand, there’s reason to believe that many or even most of them would be poor fits. For this reason, I’d rather have 100 applications directly to my careers page than 1,000 applications from a job board or even 500 from a recruitment agency.

This might seem a little extreme, but think about it: a job board or recruitment agency candidate doesn’t have to know or care very much about your business—maybe they’d never even heard of you before they applied. Someone who applies directly on your careers page, on the other hand, has done her research. Taking a new job is a big decision, and odds are that each of the 100 applicants in this pool have undertaken real consideration, have familiarised themselves with your business, and are excited to go through the process and assess a mutual fit. Many of the less qualified or less interested candidates will have weeded themselves out, and the remaining handful will not only be more qualified, but better informed—meaning that you can move through the entire interview process more quickly and easily.

How to build employer brand gravity

Now, some of you might be thinking: “that’s all well and good, but how do I get all of these applicants to come straight to my careers page?” The short answer is this: employer brand gravity.

Employer brand gravity refers to your organisation’s ability to attract candidates to your website, and it’s the natural result of smart, successful employer branding elsewhere on the web. This is partly a matter of crafting a strong visual brand that emphasises your EVP (Employee Value Propositions), but it’s also a matter of what you do with that brand. From our perspective, there are two things you should be doing to build employer brand gravity.

Outbound recruitment marketing: posting on social media channels and other platforms on the web in order to familiarize passive candidates with your employer brand narrative. This has the effect of moving candidates into your sales funnel while you establish yourself as the employer of choice in your field.

Inbound recruitment marketing: publishing value-added content on an organisation’s website, blog or other channel that answers the questions and speaks to the needs of your target candidates. This will help passive job seekers, who are simply doing research on matters related to your organisation, find you. From there, they will develop trust and potentially a real interest in working with your organisation.

By making use of these two strategies, you can begin to rely less on quantity-over-quality approaches like posting on job boards. You can put yourself in a position where high-quality applicants are coming to you, rather than the other way around. Obviously, your applicants will still come from a variety of sources, but the ones generated natively on your career page have the potential to have a disproportionate impact. After all, it’s not about attracting the most candidates—it’s about attracting the right candidates.

Adrian Cernat is the CEO and founder of SmartDreamers (www.smartdreamers.com), a recruitment marketing automation platform that helps companies engage with candidates across the web, powering up their employer brands and building brand gravity in the process. SmartDreamers was founded in 2014 and currently operates in Europe, the US and the APAC region.

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