Does your business have a marketing plan to help it succeed?
Marketing is a dynamic process that evolves from year to year. Just because a method worked last year doesn’t necessarily mean that it will work this year. So, if you haven’t done so already, follow the tips below to create an effective marketing plan.
How Much SaaS Companies Spend on Marketing
Let’s first discuss how much software-as-a-service (SaaS) companies spend on marketing, because the answer may surprise you. According to a report published by VtlDesign, SalesForce invests more than half of its revenue (53%) into sales and marketing. This apparently worked for the San Francisco-based CRM provider, as SalesForce grew by 33% from 2013 to 2014.
The SaaS email marketing company Constant Contact is also invests heavily into marketing. The same report cited above indicates that Constant Contact spends 38% of its revenue into sales and marketing.
On average, however, SaaS companies spend roughly 35% of their revenue on sales and marketing. That may seem excessive, but it’s an investment that pays off with more sales. In the case of SalesForce, for instance, investing half of its revenue into sales and marketing helped the SaaS company grow by 33% in just one year.
Identify Your Goals
When creating a marketing plan for 2017, you’ll need to identify your goals. As explained by Entrepreneur, this can range from obvious goals like sales and conversion rates, to lesser-known goals like market share, brand awareness, public relations, number of new accounts, and more.
It’s perfectly fine to have multiple goals for your marketing efforts in 2017, but you should prioritize those goals based on their level of importance. Perhaps your primary goal is to drive sales, while a secondary goal is to establish stronger brand recognition.
Identify Current Marketing Strengths and Weaknesses
You should also identify your business’s current marketing strengths and weaknesses. Which marketing channels offer the highest return on investment? Which ones are draining your budget? Are you capturing and analyzing data from your marketing efforts? These are all questions that you should answer when identifying your marketing strengths and weaknesses.
Research Your Target Audience
I know what you’re thinking: but I’ve already researched my target audience. Well, even if you’ve done it in the past, it’s a good idea to do it again, especially if you’re creating a new marketing plan.
Researching your target audience for a second or third time may reveal hidden insights that would otherwise go unnoticed. Perhaps there’s a smaller demographic that converts more easily. By researching and understanding this demographic, you can customize your marketing plan to align with their expectations.
Inbound vs Outbound Marketing
Decide which inbound and outbound marketing methods you intend to use this year.
Marketing methods typically fall under the category of inbound or outbound. Outbound refers to directly promoting a product, service or brand. Inbound marketing, on the other hand, is an indirect way to promote a product, service or brand. Examples of outbound marketing include television commercials, radio ads, direct mail campaigns and marketing emails. Examples of inbound marketing include search engine optimization (SEO), content marketing and social media.
Target Mobile Users
If you aren’t targeting mobile users in your marketing plan, you’re leaving tons of potential on the table. According to multiple sources, more users access the Internet on smartphones and other mobile devices than desktop computers.
Furthermore, a report published by eMarketer suggests that mobile will account for 72% of all digital advertising by 2019.
Create a Marketing Budget
A marketing plan should also include a budget for the fiscal year. In other words, how much do you intend to spend on marketing?
As previously discussed, SaaS companies spend about 35% of their total revenue on sales and marketing. According to the Small Business Administration (SBA), small businesses with less than $5 million — and profit margins of 10-12% — should dedicate 7-8% of their revenue towards marketing. With that said, you should base your budget on its expected return to maximize profits. Investing 35% (or more) of your business’s revenue is perfectly fine if it yields a substantial return.