The Importance Of Early-Stage Investment In Marketing For Building Your Brand
One of the biggest questions young companies ask themselves is “how much should we spend on our branding and marketing?” You’ve already allocated or spent funds for research, product development and production, but aren’t sure how much to commit for marketing at this stage. “It’s most important for us to get the product ready and then we’ll worry about marketing, right??!!??” Well, not exactly. Timing is everything.
While there is no set in stone rule for establishing a marketing budget, 12-20% of gross or projected revenue is generally considered necessary for companies in the early stages of their growth. Why? Think of it this way...You’ve put your heart and soul into setting up your company and creating a product, but you haven’t established your brand. No one knows about you yet and if you plan on selling your product and being profitable, you need to build maximum visibility for yourself.
Here’s where the timing comes in. A common misconception is that companies should wait until their product is perfected and then start their marketing efforts. That’s too late. When the horse leaves the gate, you want it to be at full gallop so you can realize immediate sales and profit. This can be accomplished by building awareness to your brand before launch by creating marketing materials that illuminate who you are and what you stand for. You don’t even need to talk about your product at this point, but you do need to talk about your company. Customers don’t buy products, they buy brands. The sooner you let people know who you are and what you’re about, the better. As you get closer to your product’s release, the time is right to develop a campaign and build interest and anticipation for the launch. That will get potential customers excited and create the desire and the need to purchase. This is the critical moment where hiring 76West pays dividends. We can develop an integrated marketing approach that will construct your brand’s environment and lay the foundation for success.
At 76West, we do all of this for companies that are not just early stage, but established as well. Even though a marketing budget of 12-20% of gross or projected revenue sounds like a big commitment to young companies or new brands, it’s a priceless investment that will pay off many times over. A few years down the road, when you become established and have a large volume of sales, you can adjust your budget to a lower percentage because you’re not new to the marketplace and don’t need to initially introduce yourself anymore. When you’re at that stage, there will be other things to think about, like analyzing your past efforts, accounting for changes in your company’s growth and updating your marketing plan.
The investment in your brand never ends, it evolves. But early stage investment is key and should not be underestimated. You can find out more about how 76West can assist you in your branding & marketing efforts by visiting www.76west.agency. There are even two tools that we offer to help establish and grow brands: Insight Session and BrandGPS®.