One of the most important aspects of running a successful business is the need to continually market yourself. Without consistent and effective marketing, no one will know you exist.

According to SBA, you should spend 7-8% of your gross revenue on marketing if your company makes less than $5 million. If your company makes more than this, you can spend up to 12% on your marketing. But should you follow these numbers blindly?

Here are two scenarios to give you a better perspective.

• Let’s say that you get 400 new leads per month with a marketing spend of, say, $4000 and every 1 in 16 of these leads make a sale. So, your current marketing spend results in 25 sales per month generating, say, $50,000 in revenue.
• You, now, decide to double your marketing budget to $8,000. But, the new revenue generated is just $60,000. (not double) 

Looking at the new sales to marketing ratio, you have exhausted your current marketing techniques. Increasing your marketing budget any further won’t witness a similar increase in gross revenue.

But, marketing just for the sake of marketing won’t do any good, either. You need to be doing this effectively. Your marketing efforts need to strike a balance between making adequate expenditures yet not sacrificing the cash you need for other needs.

This article contains some tips and strategies you need to put in place to help cut down your marketing cost.

• How can Marketing Costs be Reduced?
• How Can a Business Reduce its Cost of Sales?
• What are Marketing Costs?
• How can Digital Marketing Control Costs?
• How do Companies Save Costs?
• What are 3 Ways a Company can Increase Profits?
• What are Examples of Marketing Costs?
• What is a Good Marketing Budget?
• How Does Social Media Reduce Marketing Costs?

How can Marketing Costs be Reduced?

Marketing strategies affect budgets because they generate costs in many areas of a company’s activities. Besides the direct costs of generating marketing material, different marketing strategies require larger or smaller budgets to put into practice.

Read Also: How to Get Higher ROI From Marketing Efforts

Another aspect of strategic marketing is how you approach the market, whether you operate as a wholesaler or in retail, for example. Finally, marketing that provides feedback from your customers may allow you to reduce your production costs.

Direct Costs

A marketing budget includes costs for generating brochures, ads and other publicity material. The company incurs costs for distributing the material and for running the ads. Changing your marketing strategy can reduce such budgeted costs by emphasizing word-of-mouth promotion, promotional products, direct mail and other low-cost marketing strategies.

Adjusting your strategy to change over to digital advertising, online promotion and email marketing may also reduce your costs. The key is to identify those strategic elements of your overall marketing strategy that give the best results at the lowest costs and eliminate the rest, decreasing your budget.

Strategic Approach

Marketing strategies aim to increase sales and maximize profits, but will employ varying approaches to achieve this goal. The most expensive approach is to target a completely new market in a new geographic area. The least expensive is to increase sales to existing customers. You can reduce your marketing budget to the desired level by employing a mix of more and less expensive strategies.

Retain the inexpensive promotions to your existing customers. Look for additional sales among former customers, referrals and customers who are similar to those you already have for an inexpensive marketing strategy and a decreased marketing budget.

Market Structure

For larger budget reductions, companies must look at how they have structured their approach to the market by using a particular marketing strategy. If a company is involved in production, wholesale and retail, it can reduce overall budgets by focusing its marketing on the area where it is the most successful and has the most expertise.

The company can outsource some production or spin off the retail outlets by implementing marketing strategies that focus on the product and on how to generate sales. Inefficient production practices add to manufacturing budgets without adding value. Retail sales are generally expensive and may not be as profitable as wholesale operations.

Product Characteristics

Beyond outsourcing inefficient production, marketing strategies may reduce production budgets by identifying desirable product characteristics and eliminating costly features that customers don’t value.

A marketing approach that gathers customer feedback and looks for product features that customers want will be able to simultaneously identify features that are expensive to produce and not valued by customers. A marketing strategy that promotes continuing improvement of the products in terms of fine tuning them to customers’ needs will result in a decrease in production budgets.

How Can a Business Reduce its Cost of Sales?

Of all the metrics in the sales and marketing world (and there are a lot of them), the cost of sales is probably the most misunderstood. Many sales managers view it as a labor cost—simply pay smaller commissions, and the cost of sales will go down.

But that’s a naive way of looking at it. Sales costs are only meaningful insofar as they affect profitability. Cutting costs in a way that cuts into revenue (a more common situation than you might expect) is wasteful and unproductive. Your goal is to make sales costs more efficient, not just smaller.

More importantly, much of a company’s sales costs are hidden inside the budgets of other groups—specifically marketing, R&D, and IT. So, you must take a broad approach to create the most efficient cost of sales.

Here are some ways to decrease your cost of sales without hurting your profitability.

Compensate on profit rather than on revenue

Many companies still use gross revenue to measure sales performance. Focusing solely on revenue, however, can put you in a position where you’re losing money on each sale and trying to make up the difference by selling a higher volume. In the past, it was impossible to compensate on profit because back-office systems weren’t capable of reporting the profitability of each sale.

But today, most businesses understand their cost of goods, which makes it possible to provide salespeople with solid estimates of how much profit their sales are generating. Profit is the point of selling in the first place, so it only makes sense to measure sales accordingly. A big advantage of this approach is that it reduces the temptation to offer a discount (a hidden cost of sale) to close a deal.

Consider a strategic account program

Sometimes, winning and servicing a particular customer is more important than the profit generated by that customer. For example, a small software firm might have GM as a client and tout that relationship in its marketing materials to create credibility. In this case, it may be more beneficial long-term to keep GM happy than to worry about the profit margin.

Similarly, it might make sense for a marketing services firm to lose money at the beginning of a relationship (as in a pilot project) in the hopes of winning a larger deal to provide services to an entire corporation. The problem with “strategic accounts” is that if you have too many of them, you start hemorrhaging money.

So while you should normally compensate sales reps on profit, you also need a formal process for creating an exception where a salesperson gets compensated on some other metric, like customer satisfaction or customer retention.

Use conversion rate to measure marketing efforts

Some businesses treat marketing as a strategic activity rather than a tactical one. This wreaks havoc on your cost of sales because it encourages the marketing team to measure itself based upon actions rather than sales results.

The solution is to measure marketing’s performance based on the quality of leads they generate (with quality being measured by how easily those leads convert into customers)—not on the number of brochures they print or focus groups they run. This isn’t to say that every marketing activity should be individually measured against conversion rates.

An ad, for instance, may have a cumulative effect rather than an immediate one. But the effectiveness of the marketing effort and the marketing department as a whole should be based upon lead quality. This reduces the cost of sales because it takes less time and energy to convert promising, high-quality leads into paying customers.

Create a formal process for R&D requests

There’s nothing wrong with getting R&D staff involved in a sales opportunity; indeed, some complex products require it. However, using R&D to help close deals can vastly increase the cost of sales. Consider this: For every day an engineer spends assisting sales reps, that engineer’s current project is pushed back a day. It’s not unusual (especially in small firms) to find an entire R&D group mired in special requests from sales.

This can severely delay the next version of a product. Using R&D resources in sales situations may also encourage salespeople to sell products or product features that don’t yet exist, effectively committing R&D to do work that’s only of use to individual customers.

You can avoid these scenarios by establishing a formal process that allows sales and engineering leaders to collaboratively decide what deserves the R&D team’s attention. This will keep your employees focused and ensure your R&D costs are applied wisely.

Lower your sales-related IT expenses

Your CRM system can be a huge sales expense. This is particularly true if a CRM implementation fails, which happens about 50 percent of the time. And even if the implementation is successful, it can still be a money drainer. The worst offenders in this area are the old ERP-based, in-house SFA systems. These clunkers not only cost big bucks in license fees but also hinder sales by forcing sales activities into outdated sales processes.

Client-server implementations can be just as bad. The culprit here, however, isn’t obsolescence so much as it is the feature-creep that’s endemic to PC-based software. Salespeople want to sell—they don’t want to fuss with complicated screens.

What’s worse, if you add a bunch of applications to a client-server CRM system, it increases the complexity and creates the huge risk that your customizations won’t work on successive versions of the platform. In other words, you want to make sure your CRM is hassle-free. The simpler the software, the easier it is to learn and the less it will cost to implement and maintain. It’s also important to choose a CRM that can scale with your business.

What are Marketing Costs?

Marketing Cost means, the reasonable costs associated with promoting, selling, packaging, transferring title and moving Joint Products to the customer and include direct costs and overhead costs.

Direct costs of marketing include but are not limited to: market research; advertising; development, printing and distribution of collateral materials; selling expenses including salaries, benefits, commissions and sales-related expenses, and reimbursements paid to sales employees, customer service employees, and accounting employees involved with invoicing and accounts receivables, and an overhead burden of 15% of the employee component of direct cost.

How can Digital Marketing Control Costs?

There are cost-effective strategies to use online to further legitimize and attract people to your business and its products or services.

Whether it’s through social media, a website, or other means, subtle digital marketing tactics can make a significant difference in your organization’s marketability and profitability.

1. Retargeting Ads

Traffic goes beyond getting people to visit your website and making your business visible. For your company to succeed with a digital marketing campaign, you will need to generate targeted traffic.

Targeted traffic refers to website visitors who aren’t just browsing your site, but are actively looking for products and information. It creates better conversion rates when you can attract targeted traffic to your website as they are more likely to purchase a product or engage services and ask questions.

Good traffic is also needed for a more profitable return on investment. This way, your campaigns aren’t attracting people who are simply surfing the web, but instead, your ads are reaching people who inquire about what yout brand sells, or they buy right away.

One way to direct ‘quality’ traffic is with retargeting ads. Retargeting is an essential audience-building mechanism. With set parameters about your preferred audience’s online behaviors, interests, and demographic details, retargeting will place ads before those who would like to work with or buy from you.

In addition, retargeting can even be used on people who have purchased on your website or app once. The ads serve as a reminder of or introduction to your value. Seeing how many conversions come through and where they come from can help you fine-tune future campaigns even more.

2. Social Selling Can Connect & Convert

Consumers are savvier and more informed than ever before. Because of social media’s increasing influence, people use such channels to make intelligent buying decisions by researching products and making or reading recommendations.

Of top salespeople, 62% attribute closing more deals to social selling. More effective social selling training sessions are needed to take advantage of essential touch points in the buyer’s journey. With buyers spending more time researching, supplying them with the right help and tools while they’re looking for answers is crucial.

For social selling to work, you need a social media team that knows how to use social to connect with potential clients. Social media marketers need to monitor their profiles and provide value to prospects, engaging buyers on an ongoing, long-term basis.

Sharing meaningful, eye-catching content is the major key to making social selling work. By doing so, you establish connections with people and can play on that impact to enhance your sales efforts. Identify who you want to connect with and what platforms they use, and then plan your content for those targets.

Create content that is engaging visually and provides a solution to the customer’s problem. With every helpful and positive touchpoint with a prospect, you are positioning your brand as an industry expert.

Businesses currently practicing social selling reported the following benefits: increased audience reach and the scope, contact with prospects throughout the buyer’s journey, increasing conversion rates, and improving sales efficiency.

3. Track Success & Adjust Campaigns

Using digital marketing methods, such as on social media, can help increase conversion rates in real time. The conversion rate is the percentage of viewers who are converted into leads and, soon enough, customers.

Metrics and trackers such as return on investment (ROI), increment sales, returning visitors, and more are used to evaluate sales efficacy. These help you formulate your brand strategy, observe the issues that need to be addressed and create a more collaborative work environment as you improve.

Conversion rate and other metrics highlight weak spots within your marketing strategies. If you know an email was sent to a whole list of leads, but only a handful converted, you know something is amiss. When you see a campaign suffering, you can detect which touchpoints turned the customer off and adjust that landing page or email to be more appealing.

Acknowledging and using key metrics enables you to allot resources to the marketing channels and tactics that are working. Tracking success also helps you to replicate it more readily in the future, so you connect with prospects sooner.

4. Yield a High Return on Investment (ROI)

With any business, return on investment is a crucial statistic used to evaluate profitability.

Since you can measure ROI easily by dividing your investment by sales, you don’t have to invest too much before you can evaluate how you want to proceed. To calculate it thoroughly, you need to be sure of what your business’s aims and goals are.

Figure out your budget, the sales you need to make, and what you want to get from your digital marketing campaign before measuring your return on investment. You need Key Performance Indicators (KPIs) in order to get an accurate measurement.

KPIs include general performance indicators such as traffic, leads, and reach as well as channel-based indicators (social networks, search engines, blogs, and so on). KPIs also include source-based performance (organic search, direct traffic, referrals), campaign-based performance (including conversion rates) and setting realistic goals.

Once a campaign has run long enough to gather data, get performance reports and calculate the ROI. You need to foster a collaborative environment between your sales and marketing specialists to track and improve ROI.

Digital marketing is cost-effective for business because you can continually evaluate how and if it is working. Measuring the ROI from your campaigns helps you to re-work strategies and put the resources toward the right projects.

5. Pay-Per-Click Gets to an Audience Sooner

If you’re running a business, especially a small one, pay-per-click advertising is a must. Around 45% of small businesses use PPC advertising as part of their digital marketing strategy. Your marketing budget isn’t expansive, so every dollar should be maximized.

You can develop greater brand awareness and get instant visibility to a relevant audience, something search engine optimization (SEO) might take months to achieve.

In contrast, PPC allows you to leverage your best assets to generate leads. Ads contain a value proposition (usually in the headline and meta-tag) that your target audience of online searchers and website browsers will find relevant.

Be wise about the keywords and phrases bidded on and used, adjusting your choices slightly might not affect the volume of clicks, but it might leave more room in your budget. Strategically change things up and see where you can settle on getting the best ROI.

Using premium search techniques, PPC generates a high return on investment and allows you to limit expenditures to convert customers.

6. Customer Acquisition Costs

Customer Acquisition Costs (CAC) can be a make-or-break metric.

The CAC includes variable and fixed costs that go into converting new customers. It can even be calculated on an individual account basis to determine the resources it would take to bring on this new client. Calculating this figure for a campaign requires you to divide the total spend on customer acquisition by total new customers.

So, if $100 is spent on marketing in a year, yet acquired 100 new customers, the customer acquisition cost would be $1. These costs matter to your company and any potential investors. So, to make profitable and effective decisions, your business needs to know the average costs.

With digital marketing, a lot of your costs are low. Things like email campaigns, social media interactions and posts, and website content cost you nearly nothing to produce. When your customers come to you through these channels, your CAC is negligible.

7. Low-Cost Content and Customer Engagement

If you don’t have a big budget or you spent a lot of money on a particular aspect of a campaign, you can still advertise successfully. Use your social media to drive attention to your business by creating a series of posts that are on a trending topic and relate to your campaign or brand. This can help generate traffic from unexpected sources but from an audience that is still relevant.

Leverage your data to shape your marketing plan. Focus on what your current customers like about your company, including the emails you send, the content you share, or the promotions you do.

It’s valuable to use your analytics to gain valuable insight. And every once in a while, send out a survey to connect with and get feedback from customers. These tactics allow for honest feedback and enhanced information that numbers can convey.

Using more cost-effective strategies and interacting with your customers consistently, allows you to connect with new customers in a meaningful way. While creating a better foundation with leads means it’ll be much easier for sales and marketing to move them through the funnel.

8. Brand Awareness on a Budget

Digital marketing experts increase brand awareness through the simplest means without exerting too much spending power.

Email marketing is an inexpensive and very effective digital strategy. Compared to other digital tactics, eMarketer reports that email can generate four times the ROI. For that reason, it’s the go-to strategy for most businesses.

It costs little to nothing to run an email marketing campaign with user-friendly email management tools such as Marketo and MailChimp. All that’s needed is persuasive text from the subject line to the body, a timeline that fits with marketing goals, an enticing call-to-action, and a great landing page.

When you have the writers and designers in-house who can produce those materials, you’re set. If not, outsource copywriting and design to make emails and landing pages more appealing on a limited budget. If you work with an agency, they can set you up with great resources.

Social media marketing, whether through organic posts or cost-efficient ads like influencers, can get you the attention you need. Take advantage of trending topics, hashtags, community groups, and influencers who fit in with the image you have created. With so many channels out there, building brand awareness doesn’t have to bust the bank.

9. Take Advantage of Social Media Influencing

Partnering with social media influencers is becoming a trendy way for enterprises and small businesses to increase outreach.

If your business is in retail, this is especially useful, whether you’re selling jewelry, accessories or any other fashion-related products. If you’re a large retail brand, you could offer a higher price item in exchange for a sponsored post by a notable influencer. Though you have to pay a sum upfront, influencers have loyal followings that trust their recommendations. So, the right partner can position your products perfectly for a spike in sales.

Tools such as Klout, Kred, and PeerIndex are helpful in identifying the biggest social influencers across the major social networks. Most influencers can be found on Instagram, ranging from fashion to the music industry, as well as sports and other fields. You can also see how they fit with your industry and target audience. BuzzSumo can point out those who write and present similar topics of interest, allowing you to carve out an ideal target market.

Don’t be afraid to contact influencers. This is what they do. Tag them on social media posts if it’s something the influencer can relate to and ask them for a share. Striking up a good bond with such people in the social media industry will make your business and its services more enticing to a wider scope of people.

How do Companies Save Costs?

Many cost saving strategies affect many aspects of an organization, so it’s helpful to think carefully about the outcomes of cost saving methods before implementing them. Here are some cost saving considerations:

1. Reduce spending

Identify which tools and resources are critical for your business and consider delaying the purchase of new items. Consider maintenance costs for current assets as part of your assessment.

2. Avoid IT upgrades

In a cost reduction cycle, delay any software purchases or system upgrades. If and when you do upgrade, you might purchase software that can perform multiple functions or replace analog paperwork processes.

3. Invest in equipment

Invest in equipment that can increase efficiency through higher speed or multiple uses, but consider how long it would take the advantages of the new equipment to pay for the cost of purchase.

4. Reconsider research and development

Research and development departments help create value in the long term, but if you are looking to cut costs in the short term, consider temporarily reducing the research budget.

5. Reduce travel

Reconsider whether travel is necessary. You might suspend all business travel or institute an expense limit for business travel.

6. Evaluate employee perks

Check usage of company perks to see whether corporate memberships or discounts are providing value for employees and discontinue unused programs.

7. Check facility usage

Consider a survey to gather feedback on office and break areas. You may save costs by reducing unused amenities or by increasing pay rather than providing in-office amenities.

8. Reevaluate partnerships

Consider whether your business partnerships are serving you financially or if you could leverage your network for a better price on that service or item.

9. Improve facilities

Investing in your workspace to make it more energy efficient may contribute to lower utility costs over the long term.

10. Reduce physical inventory

Temporarily holding less physical product in inventory could help reduce storage costs.

What are 3 Ways a Company can Increase Profits?

There are 3 main ways to improve the profitability of your company:  Sell more, price higher and reduce costs.

Some organizations focus mainly on selling and on delivering great service to customers. That is great. Let us remember that profits can also be increased by greater cost efficiency. 

Here are 10 practical ways of reducing costs and increasing your profits.

1. See every cost as “up for grabs”. No cost is too small to worry about. Ask yourself: ”If I eliminated this cost, would revenue, customer satisfaction or profits be adversely affected?” For all costs associated with customer satisfaction, be sure you are only spending on what customers really value.
2. In areas where you wish to control costs, set authorization levels so that approval is required before the expenditure is made.
3. Speak to your suppliers and negotiate reductions on the cost of your purchased products. What % of your sales are you spending on purchased products? If this is 40% and you reduce by 10%, you have added 4 margin points to your bottom-line. Start with highest cost items first.
4. Never let the purchasing person be the sole person negotiating the price, as this individual can get too close to suppliers. You need to retain an element of the “tough guy”.
5. When suppliers say “no”, do not give up. Keep asking.
6. Consider the cost and use of purchased services e.g.
   1. Office supplies
   2. IT
   3. Telephony
   4. Maintenance contracts
7. Sign cheques yourself or at least above a certain value. This will keep you aware of what is being spent in your company.
8. Review all capital expenditure.
9. Reduce stock by purchasing only when necessary.
10. If you never fire an employee, you will not maximize profits or achieve a high performing business, hard as this may seem.

What are Examples of Marketing Costs?

Marketing expenses are any costs that occur when promoting a company and its products or services, which can include expenses from both traditional and digital marketing efforts. When strategizing for upcoming marketing budgets, it can help to understand the different expenses in order to consider how each one fits within your budget.

Some marketing categories and expenses can include:

1. Advertising

Marketing promotions may focus on using advertising to bring attention to the brand or the products and services it can offer. Advertisements may use traditional marketing, digital marketing or both. For example, you may consider using a combination of both print and online advertisements. Examples of potential advertising efforts to consider in marketing budgets are:

• Newspapers and magazines
• Billboards and posters
• Direct mail and email
• Television and radio
• Social media and pay per click

The advertising efforts a company focuses on may differ depending on its goals and the best way to meet them. For example, a company wanting to bring more attention to its website might use pay-per-click advertising to promote it.

Pay per click refers to promoting your company’s website on search engines and paying a set amount each time a customer clicks on the ad, which is usually near the top of the search results. The costs for advertisements may vary depending on the slot, required software or production materials.

2. Printing

Print promotions are a major component of traditional marketing strategies and can distribute information to consumers in a tangible way. Some print marketing efforts in business plans may include:

• Brochures
• Flyers
• Posters
• Business cards
• Catalogs
• Banners

These print items may vary in cost depending on dimensions, color or quantity.

3. Design and Development Services

Marketing teams may need the expertise of different individuals to help reach their highest return on investment (ROI), which can include contracting:

• Freelance designers or artists
• Freelance developers
• Freelance writers or editors
• Paid advertisement consultants

Contracting specialists can provide marketing benefits if companies have a specific goal they’re interested in reaching. For example, if they wanted to gain more traffic on their website, it may benefit them to contract a search engine optimization (SEO) specialist. These professional service providers might require either pay per hour or per project.

4. Promotional merchandise

Company merchandise can help increase brand recognition and provide opportunities for organic marketing. For example, suppose a company sells sweatshirts with its logo and someone who sees it looks up the brand, browses the products and makes a purchase. Examples of promotional merchandise are:

• Clothing
• Office supplies
• Sunglasses
• Bags

Merchandise can provide businesses with daily advertising each time a consumer wears their clothing. Materials like these might also benefit a business’s efforts to expand brand awareness if they’re hosting or attending events because they can sell or give away merchandise to event attendees. Costs for each may depend on production or quantity.

5. Tools and technology

Tools and technology can help marketing teams streamline operations and create high-quality promotional materials. Commonly used tools and technology for marketing are:

• Design software: Marketing teams can use digital design software for graphic creation, photo alteration, video and audio production or animation.
• Website domain: A site domain is the key point of access for consumers to reach a business’s official website.
• Automated platforms: Automation platforms can help streamline promotional communications because it eliminates having to send these communications manually.
• Customer relationship management (CRM) systems: CRM systems provide teams with a central place to manage customer experiences and interactions.

These tools and technology may charge monthly or yearly service fees.

6. Equipment

Creating marketing and promotional material usually requires equipment like:

• Computers
• Smartphones or tablets
• Printers
• Cameras
• Video production light or sound devices
• Monitors

The physical equipment that a company’s marketing team uses can vary depending on its specific marketing goals and needs. For example, if a company includes producing a new commercial in their budget, then they’re more likely to need video or audio production equipment. Teams may use company equipment or rent equipment as needed, which can influence equipment costs.

7. Research

Research is important for developing informed marketing and promotional campaigns because it may result in a higher chance of reaching target audiences or persuading customers to engage with a product or service. Research costs might include:

• Access to reports or journals
• Developing and distributing surveys

Research material or software costs might charge per individual use or charge a fixed service or ownership fee.

8. Event expenses

It’s important to remember that even if your company doesn’t host events, it may still incur event expenses from attending events. Comprehensive event expenses can include:

• Registration fees
• Travel expenses
• Booth or display costs
• Supplies for hosting events

Depending on the location and length of an event, the costs a company pay can vary for both attended and hosted events.

What is a Good Marketing Budget?

A marketing budget typically range from 5 to 25 percent of a company’s revenue or revenue targets, depending on company size, stage of growth, and the importance of marketing on sales within the company’s industry, among other factors.

Your company’s growth stage is the most important factor in deciding the size of your marketing budget: companies seeking to maintain their market positions budget 2-10% of revenue goals towards marketing; companies with growth targets of more than 50% (fast-growth stage) marketing budget 15-30% of projected revenue.

Once a baseline figure has been established, set aside a small portion as a just-in-case measure. Eugene Feygin, SEO Program Manager at Quill.com, who increased SEO revenue by more than $20 million year-over-year, suggests allocating 10-15% of initial marketing budget towards emergency funding. “We always have an ad hoc budget for an emergency scenario,” Feygin says.

“When something out of the ordinary happens—like a module breaking or indexing issues—we can always hire an agency or a contractor to fix it quickly using the rainy-day fund without worrying about budgeting.”

Next, make allocations based on your company’s objectives and the programs that can best help you achieve them. Determine whom you are trying to reach and focus on the channels that deliver proven return-on-investment (ROI) by connecting you to your target audiences.

Luckily, search engine optimization (SEO) and search advertising are high-performing strategies with relatively low costs, so even digital marketers with a limited marketing budget can be successful.

Since joining customer engagement software company Astute Solutions in March 2016, Assistant Manager of Digital Marketing Natalie Skarzynski improved organic traffic from 5% of all traffic to 30% (a six-fold increase) and grew lead generation by 173%.

“We’re heavily focused on adding names to our database of quality leads,” Skarzynski says. “Our expenditures are for SEO and pay-per-click (PPC) ad bids. 75% of the budget goes towards PPC with the other 25% to SEO software.”

Marketing agencies also tell their clients to spend on PPC and SEO.

Jeff Selig is Vice President of Search, Social, and Analytics at Overdrive Interactive, the digital agency that helped GE grow their organic search traffic by 286% and increase lead flow by 500% for its Centricity Advance Product line. Selig advises clients to invest in SEO and paid search for the best ROIs. “Organic traffic is number one in terms of marketing value,” Selig says.

A combination of SEO and paid search has potential beyond the sum of its parts. “A search engine results page (SERP) is like beachfront property,” Selig says. “The more of it you control, the more valuable it is for your brand. If you hold two of 14 positions on the first SERP—one paid and one organic—you control a significant percentage of that page.”

Read Also: How to Boost Search Engine Rankings

Diversification is also a consideration when planning a marketing budget for your marketing mix. High-performing marketing teams employ an average of 14 marketing tools. Adopting new tools as they arrive can prove fruitful, but be judicious in which channels you go after. “You can’t boil the ocean, Selig says. “Pick and choose based on what creates return, then distribute the budget to cover,” Selig says.

Regardless of your initial allocations, prepare to pivot quickly. For Quill.com’s SEO program, Feygin creates an aggressive marketing budget but spends conservatively to ensure strategies perform as expected. “We use a circulating budget model,” Feygin says. “We stagger services or software for a few months to see if they do what they’re supposed to do. When we invest, we expect to see returns within six months. If a solution doesn’t work, we get out of it. If it performs and you can prove it to management, you’ll get additional funds to double-down.”

How Does Social Media Reduce Marketing Costs?

According to Social Examiner’s 2015 Social Media Marketing Industry Report, more than half of its 3,720 respondents were able to reduce marketing expenses with social media marketing (SMM).

If you have a small budget and you’re not sure how to spend it, pick the social media platform that best aligns with your audience and desired clientele, then test your efforts.

Continuing the SaaS example, create two ads with the same copy to promote your whitepaper or case study. Build different landing pages for each ad. For each send you should vary form placement, call to actions, or buttons, and compare performance, making sure you test one variable per send. Which landing page has the higher CTR? Which landing page generated the most form submissions?

Testing saves you time and money by telling you what works for your audience and your business. It’s important to test periodically to account for changes in audience preference and other variables.