marketing costs

For a low volume independant store, what is the monthly minimum amount (in general) or percentage of sales that should be spent on advertising ?

I’ve been told figures from 4-8% over the years.

And then again I’ve also been told that the %'ge spent should be set at the amount of sales that you WANT to achieve rather than the %'ge of current sales.

I know plenty of people say, we don’t need to spend money on marketing as we’re busy enough but they either a) fail to see that spending some would increase sales or b) they don’t want/need the extra sales (must be nice)

What have you done before?

My golden rule based on years of experience as a marketing professional…

“5% of Your Total Sales Should be the Minimum Spent on Your Marketing."

You don’t have to spend more, but NEVER spend less.

I do not think a “flat” % is a good idea…The amount you need to spend depends on how much competition you have in your market area, how aggressive your competition is and how well you buy your marketing…For example a small indy pays more for fliers, magnets, tv ads, etc., etc. versus a chain, therefore, if the chain spends 5%, the indy might have to spend 7% to 10% just to have the same presence in the market area as the chain…

I remember going through my marketing spend versus last year. I managed to negotiate a significant reduction in getting menu’s out which meant that effectively my marketing spend was less. I decided to increase the volume I sent out AND still achieve a saving in my marketing costs.

I remember having a discussion with one of my advisers who simply couldn’t see what a great deal it was.

He kept on saving: ‘yes but you’ve decreased your marketing spend’
and I would reply ‘yes, great isn’t it!’
and his comment was ‘no because your spending less’

In theory he may be right but as far as I see it (and still do) I’m doing more, and getting managing to spend less of my cash!!

It really depends on your goals and circumstances. There are a lot of operators out there who have to spend a lot more to get noticed amid all the competition. There are others who rely on word of mouth and spend little on actual marketing. If you want to grow your business, at some time it will be necessary to spend some money on marketing. Figure out how much you want to increase your sales and set some reallistic expectations and decide how much that increase is going to cost and decide from there. Everybody’s marketing expectations and budgets are different.

In tougher times (now) we spend about 7%. When things were booming a few years ago, we were able to get that percentage down to 5%.

In small markets, the potentially biggest opponent is “churn”. The constant turnover of people and customers. You gotta spend the money to keep who you have, and to replace the ones who move, lose jobs, go on diets, have kids go into college, etc. Churn has to be overcome to stay viable in small markets. The 5% is a good starting number, then figure out if customer counts are falling, if competitors figure into it, etc.