If you grew up hating word problems in math, you’re in luck. This one is so easy, you’ll experience true redemption. You might even want to write a giant “A” in the top corner if you’re still a bit traumatized by all the red marks you used to see on your math tests.
We’re not even going to solve for x. There’s no geometry, graphing or calculator required. Okay, some of you might need a calculator, but why not? You graduated and you have nothing to prove.
The Set-Up: Your business has been growing, and you’re realizing it’s time to switch from casual, intermittent social posts to a coordinated strategy. You also want to try email marketing and get some promotions started. But you aren’t sure how much you should allocate to trying to grow through marketing.
The 25% Rule
It’s just what you think it is: New businesses should allocate 25% of their revenue to marketing. It sounds high, but you need to push a lot of energy into brand awareness, generating leads, SEO and building relationships. Established businesses may be looking at a lower marketing spend depending on business goals, but it still needs to be a priority budget item for your company.
If you haven’t been investing much in marketing so far, this number might throw you a bit. But you need to keep in mind that there are probably some costly activities currently associated with your approach to marketing:
- Time: Every bit of time you spend on social media or trying to figure out how best to build a relationship, you’re taking time away from your core business.
- Efficiency: An experienced marketer comes with a set of tools and techniques that allow them to access metrics and analytical insights to successfully run a campaign. When you take a DIY approach, you probably spend a lot of time trying to forge a new path.
- Trial and Error: While a marketing specialist will know what strategy to take in your new Instagram campaign and promotion, you may have to do a lot of testing to see what sticks.
The critical element is pivoting your mindset; you’ve got to see marketing as an investment more than an expense. According to Shopify, 50% of businesses are shuttered within five years. Investing in growth through marketing is an investment in your business’s future.
The Moment You’ve Been Waiting For: For those of you who happen to like numbers (we’ll never understand), this is the part you’ll want to see.
After hearing the above argument, which is, of course, solid, you’ve decided to hire a marketing specialist. Nice! But not so fast. You’ve got to do a bit of math first.
The Cost of Hiring In-House
It’s great that you’ve been convinced to invest in your marketing, but hiring in-house is a costly way to go. Consider this salary info:
The Base Salary: The average is around $65,000 per year for an in-house marketer.
The Benefits: You need to add around 30% of the annual salary, so probably about $19,500.
Equipment, Software, Etc.: Between a computer, cell phone and marketing software, you will spend an additional $3,500 to $8,000.
If you’ve been adding that up as you read, you know you’re into this plan for at least $88,000.
Yikes.
But that’s only the obvious costs associated with hiring someone in-house. You’ve got to add in those soft costs that tend to fly under the radar. Time is money, so add them in.
The average new employee requires about three months of training and onboarding. That’s one-quarter of your year in which your marketing specialist is costing you money but not delivering a positive ROI. That adds another $16,250 to your total.
The Cost of Outsourcing Your Marketing
You have another option. Outsourcing your marketing comes with some clear benefits:
Cost: Since we’re calling this a math problem, let’s start with the numbers. You can gain access to the expertise of a full-service marketing agency for a fraction of what an in-house team would cost you. On the low end, an outsourced marketing provider might cost between $2,000 and $3,000 per month depending on your needs.
Scalability: This is often the most important consideration for small business owners. You may need additional marketing help all year, but there is an occasional promotion or mailing that requires marketing expertise. Or you might need accessibility updates on your website or to produce some videos for social media. These are great opportunities to pull in additional help and then be able to scale back when the project is finished.
Access to Tools and Expertise: No single marketing specialist can bring the wide range of expertise you’ll find in a full agency: social media marketing, graphic design, search engine optimization, web development, content creation, Google analytics, videography, email marketing…the list goes on.
In addition, marketing agencies invest in software and other tools that make marketing efficient and cost-effective, such as automated email marketing and social media schedulers. They have access and they are trained to use it, driving down marketing costs for you.
And don’t forget that marketing teams are up on the latest trends affecting your ability to gain traction in your market. They will know where your target audience spends their time on social media, whether investing in PPC ads is worth your time and what kinds of video formats are getting the most attention.
You’ve reached the end of the math problem, but you may still have some questions. We get it; just because the math is easy, it doesn’t necessarily mean the decision is.
If you’re weighing a decision between in-house marketing and outsourcing to a team, let’s grab a cup of coffee and talk it over. No high-pressure sales pitch, just you telling us where you are at with your company. We’d love to hear about what you do and talk about how we could help. Contact us at SJC Marketing to schedule an initial conversation!