• 4 Reasons Why You Shouldn’t Pause Your Marketing

    There comes a time in a company’s evolution when they decide to pause their marketing and take a break. Common times for these breaks include summer and the weeks around the holidays, when companies are primarily focused on hitting deadlines and getting out of the office for family time. The reasons for this vary, but it usually has something to do with cost, performance, lack of vision, seasonality, or some combination of the above. In some cases, companies switch marketing teams (or employees) so frequently none of their campaigns every achieve liftoff, which in turn costs even more money for the company.

    When we ask clients why they haven’t allotted marketing budget for the upcoming period/months, we often hear excuses like this:

    • We’re heading into our slow period, so we need to save money.
    • We expected greater performance from our marketing team after 90 days.
    • We should have seen some results by now.
    • We’ll spend more budget and expand the scope as soon as we get more leads.
    • We’re not even sure what marketing is doing.

    Have you heard such statements murmured in budgeting meetings? Or have you whispered them yourself under your breath in a planning conversation? If so, we understand. But, we’re here to let you in on a secret to winning at marketing – don’t give up. Just as your competitors are quitting their marketing efforts, stay the course and your perseverance will pay off.

    When your company is tempted to throw in the towel and halt marketing, keep the following truisms in mind:

    Marketing Is More Than Just Hot Leads

    That sounds totally counterintuitive, doesn’t it? Isn’t that what all companies need? Leads; the hotter the better.

    But marketing, especially for services and B2B companies, very rarely yields an immediate wave of hot leads falling through the pipeline. This is particularly true for companies who have not significantly invested in developing their brand and, as a result, own very little market share. If your buyers don’t know you and you don’t have many case studies to support the quality of your work, your marketing must work overtime to build up your brand awareness and lure people to your website to learn more.

    But that’s not all.

    Your marketing must also continue to remind people that your company even exists. Not once. Not twice. Hundreds of times. A first time visitor to your website may be curious about your company and your products or services, but will most likely only be exploring for research purposes and not ready to purchase anything. Even if your buyer is eager to make a buying decision, it’s unlikely they’d take a chance right away with an unknown new player in the industry. Your marketing must consistently work to elevate your brand, remind the buyer about your value, and encourage them to return to your website. That’s how hot leads are formed.

    Guess what happens when you stop marketing? All of that work disappears. Your Top of the Funnel awareness dries up. Your Middle of the Funnel buyers quit returning. Any potential Bottom of the Funnel buyers forget to go back to your website. All the leads you were fostering will dry up and blow away.

    Your Competitors Are Waiting For You To Slow Down

    Going back to the beginning, if you’re a proverbial little fish trying to swim in a sea of big, strong, sharks, then pausing your marketing is analogous to handing more business to your competitors. In a highly competitive industry, the sharks are winning because they’re marketing and selling. They don’t stop swimming when the water gets rough. As a little fish trying to establish your brand, you’re threatening them and eating into their profits. And you better believe that when you stop marketing they won’t hesitate to eat up your market share.

    A more direct example of this is when you pause ads in AdWords, your ad rank drops – thus you sink down the list, thereby giving your competitors a lift in their advertising. Once you do return to run ads again, you end up spending more money to regain the position you once possessed. The same thing applies to SEO. When you stop maintaining onpage and offpage SEO efforts, your rankings drop, thereby raising the rankings of your competitors.

    Taking this a step further, when you stop marketing – even if the marketing isn’t performing like you’d hoped, you are removing your brand and your offer from the marketplace. That creates an opportunity for your competitor to capitalize on this opening. When you pause your marketing you make it even easier for them by removing yourself from the ad auctions and bringing down the cost to compete.

    Marketing Improves Over Time, Even In The Slow Period

    In nearly every case, your marketing should work on a cycle similar to this:

    Design / Launch / Test / Optimize

    In general, your marketing could take upwards of 6-9 months before you ever realize meaningful value. The process should begin with design efforts to develop a strong underlying strategy and a complete – and clear – set of goals. The first 90 days are essentially the first iteration after the launch of your marketing plan. It’s when most marketing teams review their metrics, learn what’s worked best (and least), make course corrections, and relaunch a second round.

    The continuous push for optimization, and improvement, is the hallmark of a good marketing team. Rather than letting anything stagnate, your team should consistently review metrics and make changes as necessary. After 90 days, there will be a body of data to inform the team of how to launch the next marketing campaign – if necessary! Sometimes it makes sense to do more of the same before changing things up in another 90 days.

    Regardless, along the way, your marketing is improving over time as your ad rank improves, your SEO rankings increase, your brand loyalty grows, and your buyers return to your site to engage with the company.

    Marketing Is More Expensive In the Beginning

    If you’re seeing numbers in the red and feeling the urge to pull the plug on your newly launched marketing strategy, just hold tight. Like any new, untested strategy, the first few months might produce some turbulence and feel like more work, and money, than it’s worth. But you can breathe a sigh of relief, because if you stick with your marketing strategy you won’t have to reinvest in setup costs, initial bids, initial tests, etc. As your marketing moves forward, your site will start to rank higher in search results, your ads will be seen by more people (and the right type of people) and your tools will start working together, all of which will, in turn, create a well-oiled marketing machine that produces ROI down the line.

    When choosing a marketing team, make sure to pick one that routinely reviews their efforts and uses the results to optimize your campaigns. You want a team that spends your money like it’s their own and takes action to make your dollar stretch the furthest and work the hardest.

  • How Much Should You Spend on Marketing?

    We often get asked, “How much should I spend on marketing?” It’d be nice if the answer was easy, but it’s not. There is no predetermined percentage of revenue that applies to all businesses. The ideal number takes into account what you’re offering, where you’re offering it, and who you’re competing against. We’ve probably all heard, “you’ve got to spend money to make money,” and this certainly applies to digital marketing. The trick is knowing how to make your expenditures generate returns.

    Industry Spending

    Traditionally, the amount to spend on marketing usually depended on the offering and industry. For a company selling a product, it’s recommended that no less than 15% of revenue be spent on marketing just to maintain market share. However, a consumer goods company could spend up to 25% or higher, depending on goals. For professional services, typically no less than 10% of revenue should be spent to maintain market share, and up to 20% or more to increase growth.

    For more conservative numbers, the U.S. Small Business Administration (SBA) recommends businesses invest 7% to 8% of gross revenue for marketing and advertising if they are generating more $5 million a year in sales with a net profit margin between 10% – 12%.

    The SBA says that B2B firms typically invest 6-7% of revenue in marketing, but businesses with less than $25 million per year in revenue ordinarily spend more than 10% on marketing on average.

    In a 2017 survey, Deloitte and Duke University asked CMOs what percentage of their budget is spent on marketing. The results are below:

    As you can see above, professional services companies – tech software, mining, construction, etc. – are spending the industry average, or more, on marketing. But, SaaS Companies don’t always stick to the rules. Here are some examples of companies who spent way more on their 2016/2017 marketing budget and experienced great results .

    • MindBody – 40% of revenue invested in marketing, 37% revenue growth year-over-year
    • Salesforce – 49% of revenue invested in sales and marketing, 24% revenue growth year-over-year
    • Tableau – 58% of revenue invested in sales and marketing, 27% revenue growth year-over-year


    We’re not suggesting that you drop nearly half of your annual revenue on marketing. But increasing your investment in your marketing strategy will be the thing that sets you apart from your competitors. It is your secret weapon to get ahead.

    For professional services, you have to dig a little deeper. The cost of easily consumable content for your website can really vary depending on the complexity of the subject matter and the length of the topic. A short blog post could be as low as a few hundred dollars, whereas an e-book or white paper could run you a few thousand dollars. Social media marketing that is guaranteed to drive traffic to your website typically starts at no less than $2,500 per month – with some robust, national campaigns coming in between $10,000-$20,000 per month. A strong SEO strategy with both onsite and offsite ordinarily runs between $1,500-$5,000 per month, with some companies spending double those amounts monthly.

    What are average rates for digital marketing? A survey conducted by Moz, a leading SEO website, of over 600 agencies resulted in the following summary:

    • Digital Marketing hourly rates range from $76–$200/hr
    • Project-specific pricing ranges from $1,000–$7,500
    • Most monthly retainers cost between $2,500-$5,000/month


    And, using a mean value between what’s recommended by the SBA (10%) and what we recommend (15%), your overall marketing budget should probably be about 12.5% annual revenue. Breaking that down even further, multiple sources, including Forrester Research, have indicated that digital marketing currently averages about 30% of total marketing spend. So, in a very general sense, your digital marketing budget should be about 3.75% of your annual revenue (30% of 12.5% = 3.75%) .

    Here’s an example:

    A B2B firm providing technology services to other businesses with $8M in annual sales might budget $300,000 (3.75% x $8,000,000) ($25,000/month), which would likely include website, conversion rate optimization, SEO, social media management and a mix of paid advertising campaigns with Google AdWords, Facebook and LinkedIn – including ad spend.

    How to Spend It

    After settling on a number for your marketing budget, the next big challenge is deciding how to spend it. Another CMO survey from Forrester Research and eMarketer show the estimated allocation of marketing funds offline vs. online and across the digital channels.

    Here are some conclusions from that report [source: WebStrategies]:

    • In 2018, the average firm was expected to allocate 41% of their marketing budget to online, and this rate is expected to grow to 45% by 2020
    • Search engine marketing will capture the largest share of online spend with online display (banner ads, online video, etc.) taking the second largest share
    • Social media advertising investments will continue to grow, with a 17% compound annual growth rate from 2016 to 2021, and is expected to represent 25% of total online spending in 2018.
    • Mobile marketing has grown to a point that it’s no longer tracked in the forecast and it’s presumed to be considered across all channels
    • Digital marketing is pacing at an 11% compound annual growth rate between 2016 and 2021 with the biggest growth occurring in online video.
    • Investment in paid search, display advertising, social media advertising, online video advertising and email marketing is predicted to account for 46% of all advertising by 2021.


    Why are companies investing in social media and other online channels? A recent survey of 2,500 digital marketers showed that the most effective marketing tactics (email marketing, organic search, social media marketing and content marketing) generated better ROI than traditional (brochures, trade shows, etc) [source: GetResponse].

    A Home For Your Brand

    However, before any social media or content marketing is launched, a company must have a fully developed brand that is clearly defined on a website with a user-friendly experience. The products and services you sell and the promises you make must be explained in a compelling way that engages the visitor from the moment they arrive at your homepage. Your website is the entry point to the sales funnel. You must lure people in instead of turning them away.

    Research supports this, but intuitively we all follow the same behavior. When was the last time you hired a company without looking at their website first? Probably in the ‘90s, right? We all do our Google research. We even visit social media to continue our research. Over 80% of people look up a company online before visiting the business or deciding to buy.

    Before visitors become your customers, they have to know that you exist and what you do. Does your homepage make it clear what you’re offering? Is there an obvious action they should take – “Call Us Today!” – or an email sign-up? Of your potential customers, most are looking at your website on their mobile device. Is your site optimized for a smartphone? What’s their first impression of your company?

    The value of the investment in your site cannot be underestimated. You may be able to get by with a basic website with little to no brand messaging and conversion methods, but you’ll cap the potential for revenue growth.

    Invest In Success

    If you don’t set aside a large chunk of your budget for an excellent online presence, you can count on your customers going to a company that does. Under-investment in your digital marketing strategy results in “leaving money on the table,” because your customers are going to work with your competitors with a great website and engaging online presence.

    Have questions about budget or what strategy your company should use? For professional services and technical companies, it can be frustrating knowing just how much to spend on marketing and where to spend it. At Divining Point we specialize in working with companies who promise quality service as a part of their business model. Give us a call and we’ll get you on track.


    Want to move forward with your business? Let’s talk.