How much do u spend each month on marketing?

[perfect786]

@fundone2000ld Are you a service, a SaaS, B2C, large enterprise deals? Answer depends a lot. Sales and marketing are very different too, sales are much better for early companies (outbound, targeted) as you get live feedback, it's generally cheaper. Marketing has it's uses (understanding messaging or VC-funded growth) but is a common way start ups run out of money.

 

[fundone2000ld]

@perfect786 SaaS + service. You can think of it as a tech-enabled service kinda biz.

We are doing direct / cold emails now and google ads to get inbounds. But wondering if I should invest more to get more revenue.

 

[harlowraina]

@fundone2000ld Couple hundred dollars on FB ads.

 

[hopecountypreacher]

@fundone2000ld B2b dev and hosting. We spend $500 a year to our local chamber of commerce. We get all of work from our network and referrals.

 

[kev40]

@fundone2000ld You said you are Software as a Service AND Service? Can you please explain that a bit for me so I can be more helpful in my reply?

 

[fundone2000ld]

@kev40 A little like Upwork;

Saas for self service / smaller clients.
Managed service aka full service management for bigger clients.

 

[kev40]

@fundone2000ld Ok, I was a former $100M agency co-owner that exited two years ago. Can help to some extent.

• Allocate marketing based on % of gross margin per transaction.
• Your transaction has a composite of services most likely. Track that and market accordingly. If you are trending towards one service being more or less popular than another, shift your marketing spend accordingly. Don’t spend on services you continually see drop off due to satisfaction issues or competition. Market on your strengths (your core) and then tie your dollars to attribution revenue associated with non-core. Some customers will be core and some will start as non-core. Find those targeted customers and thread them through your marketing pushes.
• If your GM is 80% spend 30% on marketing.
• If GM is 50% spend 10-12% on marketing.
• Stay above 35% NOI.
• If you see slowdown on new CA survey existing customers to inform a pivot.

 

[24korange]

@fundone2000ld Large companies are known to spend as much as 40% of their entire budget on marketing. If you consider only ads to drive sales, marketing, you're doing it wrong.

Content, site optimization, email, events, PR, social media, competitive analysis... All of this is marketing, and the time spent should be a consideration of "cost" too in the sense that you can do a lot of that yourselves, but if you're not doing it all, you're likely to fail

 

[cg520]

@fundone2000ld $0 as a startup. Get clients first, test and vet your product, make changes on the feedback, and once you have a solid user base, then market.

Edit** Social media is free. We all have phones. Canva has premade templates. Marketing doesn't need to be perfect when you start. It's just about getting the message out there and having a presence while you prove your business model.

 

[fundone2000ld]

@cg520 Heya we do have revenue (~$30k/month).

We have colleagues who handle design and marketing — I’m wondering more about how much do others spend on the channel and not the content creation itself.

 

[cg520]

@fundone2000ld Then it depends on your market size and growth opportunity. Marketing isn't just about setting a budget and spending it. It should always be changing based on the economy, your market growth, the effectiveness of your spending, time of year and so forth.

 

[pflaum13]

@fundone2000ld You guys should figure out how much you can spend for a customer. Since you’re bootstrapped, the faster you can get your marketing cash back the faster you grow.

Don’t looking it as a budget. Look at it as figuring out your LTV (as best you can) and your cost to aquire. And how long it will take and you are comfortable risking to get it back. Faster the better! So you can re invest.

 

[doctorpharm]

@fundone2000ld Let's say I invest 70% of what I earn last month. Re investing every month until I reach my goal!

 

[jackanderso]

@fundone2000ld In general, my target ROAS has always been about 4X to 5X, based on some short-term revenue objective. For example, your customer value for the first 6 months or a year. Depending on your SaaS industry, that ROAS target may be in full LTV.

If you're a service company, I'd do the math based on your customer value for the first few months. So, if you think your average customer will spend $5,000 in the first 6 months, try to acquire it for $1,000. If your customers could theoretically stay with your for years, your ROAS will be much much higher than 5X.

 

[pastor1955]

@fundone2000ld The litmus I would suggest using is your LTGP:CAC

LTGP - lifetime gross profit instead of LTV

CAC - cost to acquire a client/customer

This ideally is at least a 3:1 on a 30D Cash Basis

30D Cash Basis - you are making 3x on spend in the first 30 days

A brief as to "why"

This is how you eliminate the need for a marketing budget. You are getting paid to acquire clients and more importantly paid well, they are paying you to acquire your next customer.

Math:

30D Cash is $30

CAC is $10

You profit $20 = the acquisition of 2 more clients OR pocket $10 and use $10 to acquire another client and then whatever recurring revenue model you have in place is profit (less cost of delivery of course)

What most businesses do (especially when they have a recurring model) is they budget for marketing and lose money on the acquisition then breakeven 2/3 months in then get into profit based on the client staying for more months.

Now, in practically the best way to actually do this: is to establish a DEP (defined end program) for your SaaS. From a competitive angle this also gives you an advantage. You offer X in Y time with a guarantee, people are willing (and happily) pay 3x to 4x more for a one-time than they will for a recurring service.

When they are first signing up for your service is ALSO when they are most excited to be working with you - therefore it is sensible and logical to extract value here. Rather than the typical model of "let's upsell later" when the excitement has worn off.

To knock out the question of "but we are recurring" - you are going to "upsell" them continuity. The power of a DEP is it "creates" customers.

This has gotten long-winded but I want to equipped you with a one up to having a marketing budget by giving you the ability to eliminate the need for a marketing budget haha

But, the easiest way to explain how a DEP creates customers -

If I am a trainer, and I have a 6-week program that gets you to lose 20 pounds, if you do not hit your goal I work with you for free until you do. If you hit your goal what do you need now? Maintain it, who is an expert in that space? Me. The logical move, is pay me to help you maintain it - by getting you a goal I now also made you a customer.

Price for the above example to illustrate upselling continuity:

$600 for 6-weeks = $100/week for the DEP

My recurring is $50/week so from a sell perspective it will be positioned as "you are going to get everything you got for the 6 weeks + XYZ, for half the price you were paying"

I could explain more in-depth but hopefully this sparks some "ideas" for you and your team to play with

Good luck on your exciting journey!

 

[olympica]

@fundone2000ld I would look into Databox Benchmark groups. You can use their explorer to find company groups by industry and ad platform, and get a good feel for what people are spending. I'll link their general linkedin ads benchmarks below, from hundreds (or maybe thousands?) of companies. I'd explore their system, i bet you can find startup-specific data in it. It's free.

https://benchmarks.databox.com/explorer/report/uj2agPKn