It’s a fact that there are many risks associated with small business and startup marketing and there are chances that you might fail. So, it is very important to ask yourself how you can minimize your risks of failing in marketing.
This is important and must be considered even before setting up marketing budget for startups. There are certain techniques to help you understand the risks associated with each type of marketing activity.
Based on your understanding you should set budget for each activity, analyze your results, and increase of decrease your budget accordingly to maintain the ROI on your marketing efforts.
Let’s say you charge $100 per client and you’re willing to give $25 for one client/sale. Now you’ve $500 to spend on marketing every month, which means you must make 20 sales in that particular month and earn a gross $2000.
The less you gross, the more risky it becomes!
Now spending all $500 at one place is highly risky, i.e. you may want to spend it all on Google Adword, but a wise idea is to split the investment to minimize the risk.
Research is the key to minimize the risk. So, you should start with researching your competitors to check where they are spending more. SEMRush is a great way to check their investment on paid search, Alexa can also give you a fair idea of where they are getting traffic from and a little more research within your particular industry can reveal some more secrets of your competitors.
Based on your competitor research, split your investment in 2 or three different channels, constantly analyze the result and invest more on the highly converting channels and decrease the investment on non-converting channels.