For whom is this blog:
For founders and managers in software development companies with teams of 3 to 30 people
For service companies that start their marketing
You will find here:
How to start crafting a marketing budget in your software development company?
Main components of the marketing budget in the software company.
The marketing budget templates for starters.
How to implement the budget and keep it live.
What Is A Marketing Budget?
As a software development company, startup, or well-established, marketing is inevitable. In fact, the effectiveness of your marketing activities will significantly impact the overall success of the company.
Yes, you have mastered the software development skills and you have the A team, but do you have a consistent flow of customers? Is your calendar fully booked with clients who want your skills and hopefully award you with their software development project?
How do you get there? How do you scale your company from $0 to $10k, from $10k to $100k, and from $100k to $1 million and more?
Marketing. Brand awareness. This is the simple answer. Simple as it sounds you will need to devote resources to make the marketing effective and accountable. Crafting a solid marketing budget for your software development company is the first step.
A marketing budget is the sum of money put aside by a business to promote its goods or services over time, often one year. The majority of companies include a marketing budget in their overall business spending.
Seems to be obvious? In reality, it is not. Quite often I observe adhoc marketing spending rather than planned actions.
What is the Ideal Size of Your Marketing Budget?
Notably, not two businesses are exactly the same, right? This means that the marketing budget amount varies from business to business and is frequently determined by the company's sales targets.
If you are a startup with no prior marketing experience, it is advisable you seek the services of a specialist who has diverse experience with marketing for software development companies. Marketing budgeting mistakes are costly!
You need to establish all the processes, test them and make sure they are running as desired. This is where a marketing specialist who knows the industry inside-out comes in. Until this is done, you can be sure to fail terribly in your budgeting as well as the overall marketing strategy.
That said, the size of your marketing budget heavily depends on if you have a tested and proven working marketing strategy if you intend to hire an in-house marketing specialist or outsource a marketing agency, and if you are an established software development company or a start-up.
I can’t stress this enough; you need to invest in your marketing! Marketing is never and will never be free; but without it, you don’t get customers which means you don’t make any sales or revenue. Let the world know your company and what it does, and while at it, give it your best!
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Book a meeting with GrowMy.Tech, to check how you can start getting clients globally with structured marketing and sales strategy.
Types Of Costs To Include In A Software Company Marketing Budget
The cost of marketing a software company can vary widely, depending on the size and scope of the company and the type of service it offers.
For a small business or small company, a few thousand dollars may be enough to get the word out and generate some interest. For a larger company, the cost can easily run into the millions. However, irrespective of the size, the goal is a high return on investment.
The key is to determine what will work best for your company and your budget. There are many ways to market a software company, from losing importance but still valid traditional advertising to plenty of possibilities in digital marketing.
Figure out what will work best for you and then invest the necessary funds to get the results you want. You may be wondering, how?
The only certain way of knowing what works for your company is through testing and experimenting with different marketing strategies. This process of testing requires a significant investment of resources; time and money. Think of it like building a foundation; it has to be done right otherwise everything built on it will crash with time.
Alternatively, you can leverage the experience of a marketing specialist in your vertical; hence saving you time. For example, if you provide blockchain development services, hiring a marketing specialist in this niche means they will bring years of experience from working with similar companies to yours.
When it comes to marketing, one of the most important things to consider is your budget.
How much money are you willing to spend on marketing? What kind of return are you expecting to see? These are important questions to ask when creating your marketing budget.
The 70-20-10 rule is a useful formula to use as a starting point for budget allocation if you're unsure where to begin. Taking this as a standard:
70% of your budget is allocated to tactics you are confident will be effective.
20% of the budget is set aside for innovative tactics that will support your growth.
Your experimental tactics budget is 10% of your total budget.
Digital media accounts for more than 50% of both worldwide and American advertising spending. This includes marketing initiatives that target users of desktop computers, mobile devices, search engines, streaming video platforms, and social media.
You can consider investing at least half of your marketing spend on some of these digital channels given the success marketers have experienced in them.
Marketing Costs Breakdown
Some marketing costs you should include in the marketing budget for your software development company include:
Content Creation
The cliché ‘content is king’ never gets out of fashion. Why? Content is what drives users to trust your brand. Content is how you can offer real value to your audience consistently. Trust molds loyal customers.
Some key content types to consider for your software company includes: case studies, demo and instructional videos, user guides, blog posts, social media posts and videos, as well as white papers. Creating high-quality content requires investing funds into it.
Analytics
The most popular analytical tools are free, especially at the initial stage. See Google Analytics, Google Search Console, HotJar, or some of them might be quite cheap like UberSuggest + CRM like HubSpot, PipeDrive or LiveSpace.
It is a must-have point to all companies should start with. No future planning would be possible if you do not have data.
Rate & Review Platforms
Customer reviews can make or break your company. I cannot stress enough the importance of having credible reviews for your software development company.
Why ratings and reviews? Because they are marketing and sales assets you can leverage to win customers.
Moreover, there is a learning opportunity. Reviews can help you improve your services, target the customers’ pain points and even package your services better.
The key rating and review platforms you should make sure your company is present are; Clutch, G2 Crowd, and GoodFirms. If you do not know how to get your company there, seek the services of a marketing specialist. They will help you organically position your company on these platforms as well as explore promotion opportunities for wider and more targeted visibility.
Digital Marketing and Advertising
Digital marketing involves the use of social media, content, email, and Search Engine Optimization to reach potential customers.
Here is a sample breakdown of key digital marketing costs:
your team
All the above key marketing activities have to be carried out by a highly qualified and effective team for your company to get the desired results.
Zippia estimates that the cost of hiring a new employee is $4,425
You can hire an internal marketing team to carry out all or part of your marketing. If you want to outsource, hiring a digital marketing agency is a major step toward marketing your software.
Marketing Automation software
If you are considering digital media, which you should, as a part of your marketing strategy, acquiring the ideal marketing software is essential.
Almost all digital marketing campaigns and activities will require software (separately or shared) to effectively execute the campaigns and measure the performance.
Some of the key marketing automation software categories include: content creation, marketing automation, sales funnel, customer relationship management, social media, online advertising, lead capture, and lead generation. When it comes to marketing automation, start with simple automation such as email sign-up and newsletter, then build up to more comprehensive systems as you progress.
Marketing Budget Templates
Here is a sample marketing budget template:
Here is another example from HubSpot:
4 Steps To Follow When Creating A Solid Marketing Budget For A Software Company
Now that you are well informed on why you need a marketing budget and what to include, let's discuss steps to follow to make sure your budget is solid.
There are a few steps you should follow when creating your budget.
First, you need to determine your marketing goals. What are you trying to achieve with your marketing? Once you know your goals, you can start to allocate funds accordingly.
Next, you need to consider your target audience. Who are you trying to reach with your marketing?
Once you know your target audience, you can start to think about the best ways to reach them. This will help you determine how much money you need to allocate to each marketing channel.
Finally, you need to consider your timeline. How long do you want your marketing campaign to run? This will help you determine how much money you need to set aside each month.
By following these steps, you can create a marketing budget that will help you achieve your goals.
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Book a meeting with GrowMy.Tech, to check how you can start getting clients globally with structured marketing and sales strategy.
How To Effectively Track A Marketing Budget As A Software Company
Business owners know that a healthy marketing budget is essential to the success of their company. But what often gets lost in the shuffle is how to effectively track that budget.
Fortunately, there are a few simple steps that any business owner can take to get a better handle on their marketing budget.
First, designate someone in your company to be the primary point of contact for all marketing expenditures. This will help to ensure that all marketing expenses are properly documented and accounted for.
Second, develop a system for tracking marketing spending on a monthly basis. This will give you a clear picture of where your marketing dollars are being spent and whether or not your budget is on track.
Finally, make sure to review your marketing budget on a regular basis. This will allow you to identify any areas where you may be overspending and make adjustments accordingly.
By following these simple steps, you can take the guesswork out of tracking your marketing budget and ensure that your marketing budget is being well spent.
Factors That May Impact Your Marketing Budgeting
One of the most important is the size of your target market. If you're targeting a large market, you'll need to spend more to get some visibility.
Another important factor is competition. If you're in a highly competitive industry, you'll need to spend more to stand out from the crowd.
Finally, the economy can also play a role in your marketing budget. If there's a recession, for example, you may need to cut back on your marketing spending. This is extremely visible in the current time when the world is facing unpredictable events called black swans (Covid lockdowns, disruptions in global supply chains ) and those somehow more predictable (global inflation, Russian savage aggression on Ukraine, etc.).
Mistakes To Avoid When Creating A Marketing Budget For A Software Company
When it comes to marketing budgets for a software development company, there are a few mistakes to avoid.
One mistake is underestimating the costs. Underestimating the costs or marketing spending can lead to an underfunded campaign that doesn't reach its full potential. In other words, being too optimistic towards campaigns. This is a common mistake when you start, as you have no benchmark.
Another mistake is failing to allocate enough money for promotion. Failing to allocate enough money for promotion can leave your marketing efforts invisible. It is important to remember that some tactics are short and long-term actions that require time and funds - the best example is content marketing. On the other hand, PPC can be assessed almost on the spot. But once you see the first positive effects of your campaign I highly recommend allocating more funds to the campaign to increase ROI.
Another is allocating too much money to one marketing channel while forgetting about the others. Allocating too much money to one marketing channel can lead to an imbalanced campaign that doesn't take advantage of all the channels at your disposal. It is also dangerous for your business, as you are susceptible to the channel's unpredictable changes like an advertising platform failure, increase in costs, change of advertising policy on the platform, etc.
Testing too many channels and running too many campaigns at once. Each tactic or campaign requires time are resources (internal or external). Once you start too many tasks you might expect delayed outcomes, low quality, and difficulties in measuring and analyzing data.
In a survey conducted by Rakuten Marketing of 1,000 marketers worldwide, participants indicated they squander an average of 26% of their budgets on inefficient channels and tactics.
All of these mistakes can have serious consequences.
To avoid these mistakes, take the time to carefully analyze and calculate the costs of your marketing campaign, allocate a realistic budget for promotion, and spread your marketing funds across all the channels you plan to use. By doing so, you'll be much more likely to create a marketing budget that meets your needs and achieves your goals.
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Book a meeting with GrowMy.Tech, to check how you can start getting clients globally with structured marketing and sales strategy.
Conclusion
After creating a marketing budget for your software development company, the next step is to put that budget into action.
To do that, you will need to create a plan that outlines how you will allocate your resources and what activities you will pursue. This plan will be your roadmap for marketing success, so it's important to take the time to create a well-thought-out strategy.
Once you have your plan in place, it's time to start executing it. This will require allocating your resources and taking action on the various marketing activities you've identified.
But with a sound plan and a clear idea of what you want to achieve, you'll be well on your way to achieving the marketing goals for your software house as well as increasing the ROI, and company revenue.