Effective digital marketing for manufacturing companies begins with a strategy. Before diving into tactics and reaching out to your audience, it’s important to define your goals and create a plan that will allow you to achieve those goals.
A key component of marketing strategy for manufacturers is setting a reasonable budget. Industry benchmarks will get you started, but every manufacturing company should analyze their own goals and resources before setting their budget. From there, consider the ROI of your digital marketing spend. To optimize ROI, you need a budget that gives you enough spending power to develop a variety of tactics and execute them effectively, but prevents aimless or non-strategic spending that won’t return the results you need.
Questions to ask when setting a marketing budget
If you’re beginning to craft your marketing strategy for your manufacturing company, ask yourself:
- Do your business goals for the year include ambitious growth plans?
- Are you planning a new product launch?
- Will you be rebranding this year?
- Is your website up-to-date and modern?
- Do you have enough evergreen marketing collateral (brand anthem videos, flyers, etc.) that can be leveraged at sales events throughout the year?
If your B2B manufacturing company is planning on any big growth or changes this year, you may need to set your digital marketing budget at the higher end of the spectrum.
How to set your manufacturing company digital marketing budget
Your budget should always be set after you’ve defined your goals. The goals should inform the budget, which should in turn inform your strategy and tactics. But once your goals are in place, it’s time to think through the amount of money you should allocate to digital marketing in order to achieve your goals.
The U.S. Small Business Administration recommends that small businesses with annual revenues of less than $5 million allocate between 7-8% of their revenue to marketing. So if your company has a revenue of $1 million, your marketing budget should be about $75,000. Keep in mind that the budget needs to encompass all aspects of your marketing, including paid advertising, marketing software or tools, paying marketing agencies or personnel, and building and maintaining your website.
For larger companies, the rule of thumb for B2B businesses is to spend 2-5% of their revenue on marketing–so, a company with $50 million in revenue would spend between $1 and $2.5 million on marketing.
In order to demonstrate the return on investment for your marketing, it is critical to identify relevant KPIs and stick within your allocated marketing budget. Then, you’ll be able to quickly see and justify that the benefits of your marketing outweigh the costs. You can always adjust your budget up or down based upon results. The key is to get data and let that data drive your decisions.
What do manufacturing companies spend their marketing budget on?
Industry trends illustrate certain areas that manufacturing companies tend to focus on with their marketing spend:
- Mid-sized B2B manufacturers spend an average of 11.6% of their marketing budget on customer experience initiatives.
- Digital marketing (compared to traditional marketing) currently accounts for 53.2% of manufacturers’ marketing budgets.
- Customer relationship management is often the largest component of a manufacturing company’s digital marketing budget.
Of course, when determining how to allocate your budget, don’t just blindly follow industry trends. Take your business goals into account and analyze the gaps in your sales funnel. Are you struggling to generate new leads? To nurture prospects through the lower part of the funnel? Do you need a higher sales conversion percentage? Your digital marketing spend will differ depending on your target areas of growth.
Partner with a digital marketing agency for manufacturers
Many B2B businesses struggle to set a reasonable budget, which can lead to lower ROI for their marketing tactics. At ZAG FIRST, we have years of experience working with your industry to execute the best digital marketing for manufacturing companies. Contact us to learn more about how we can help you set your budget, create your plan, and achieve your goals.