If you’re like most heavy equipment dealerships, your digital marketing budgets have grown exponentially in the last decade. So how should you approach budget planning? You know budgets aren’t endless: What’s the right number?
To inform the budgeting and allocation process, here are a few questions and resources for equipment dealers to start with.
What should equipment dealers spend on marketing?
The good news is, there are a wealth of resources online that can provide competitive data and help you gain an understanding of what your budget should look like. The bad news is, while these online resources can be helpful, most third party sources lump material handling, ag and farm, and construction equipment into “B2B products,” which incorporates big spenders like tech companies. For example, according to SAI Books, B2B product companies have an 11.0% advertising-to-sales ratio, while industrial equipment companies have a 1.4% advertising-to-sales ratio.
Whenever possible, make sure you’re using industrial specific data to right-size budget recommendations to your business category. From there, use your company’s financial data and goals, to create minimal to aggressive spend ranges. If you need help understanding the opportunity that exists in your market, Adpearance can help provide a free digital analysis.
What percent should go to each channel or tool?
Once you have your total marketing budget, you’re ready to prioritize channels and allocate spend. While you should ultimately dictate spend based on your market, audience, resources, and ROI, understanding the landscape you’re competing against can help ensure you’re covering the right channels and not missing out on clear opportunities.
According to Gartner’s CMO Spend Survey, businesses spend 25% of their annual marketing budget on digital efforts (paid search, organic, website, email). 21% of that budget is spent on advertising, with the majority dedicated to search advertising and other digital channels. The remaining 75% is split between marketing technology (email marketing, website management, analytics), labor, and agencies. For both on- and off-line marketing efforts, consider the people, resources, tools, and software you need to be successful.
How does your business define success?
Before you activate your marketing channels and start spending, make sure your goals are clearly defined and articulated so that once your campaigns are live, you can spot successes, course correct as needed, and everyone can celebrate the wins.
Zero in on the metrics you need to see in order to determine success. Use them to set goals that you can benchmark against each month to ensure you’re pacing appropriately. And be specific; if you’re expecting a 5:1 return on investment and your boss is planning on a 200:1 return, there’s some alignment that needs to happen. By syncing your budget and goals, you’ll benefit from allowing your key business objectives to drive your data insights, rather than the other way around.
How can equipment dealers track ROI?
There are a variety of KPIs for equipment dealers that can help you track the success of your marketing channels and campaigns, but what really matters is connecting these marketing efforts to business outcomes so you can see how they’re truly impacting your bottom line. To connect your pipeline all the way from clicks to conversions, and finetune your marketing spend based on real ROI, you need to be able to answer the following questions:
- How many relevant searches are there in my market each month?
- From those searches, how many people are visiting our website organically?
- How many people are seeing and clicking on our ads? How much are we paying per click?
- How many quality leads are we getting per month? How many visitors to our website convert to quality leads?
- What is our cost per lead per channel?
- What percentage of those leads are sales qualified?
- How many leads convert to a sale?
- What is our cost per sale per channel?
The answers to these questions should be readily available to help you determine the success of your marketing efforts. If you work with a digital marketing provider, they should be able to report on this information on a regular basis. And if you work with Adpearance, you’ll receive access to a customized reporting dashboard so you can review your reporting metrics in real-time.
We’re big on transparency, passionate about digital marketing that pulls its weight. If you need help at any point in this process and know that it’s time to generate real ROI from your marketing efforts, reach out to learn more.