Determining the right level of investment in marketing strategy is a perennial question for Australian small and medium enterprises. It’s not about a fixed percentage of revenue, but about aligning spend with growth ambitions and the evolving market landscape. As we look ahead, several factors will influence what businesses should allocate to strategic marketing work.

Historically, many SMEs have underinvested in strategy, focusing instead on tactical execution – things like social media posts or running ads. While these tactics are important, they’re far more effective when built on a solid strategic foundation. We’re seeing a shift, driven by increased competition and a more sophisticated consumer. Simply ‘being present’ online isn’t enough anymore.

Here are some key considerations for setting a marketing strategy budget:

• Growth Targets: Aggressive growth goals require a larger strategic investment. If you’re aiming for significant market share gains, a more comprehensive strategy – including market research, competitor analysis, and detailed customer profiling – is essential.
• Market Maturity: In established markets, differentiation is key. This demands strategic work to identify unique value propositions and refine positioning. Newer, rapidly evolving markets require agility and continuous strategic adaptation.
• Customer Lifetime Value (CLTV): Understanding how much a customer is worth over their relationship with your business is crucial. Higher CLTV justifies a greater investment in acquiring and retaining those customers through a well-defined strategy.
• Channel Complexity: As marketing channels proliferate, a clear strategy is needed to integrate them effectively. A fragmented approach wastes resources and dilutes messaging.

For most Australian SMEs, we recommend allocating between 5% and 15% of your *total* marketing budget to strategy. This isn’t a hard rule, but a useful guideline. A business with a $50,000 marketing budget might allocate $2,500 to $7,500 for strategic planning. This covers things like market research, brand positioning work, and developing a detailed marketing plan.

Don’t view this as an expense, but as an investment in future growth. A well-defined strategy provides clarity, focus, and a roadmap for maximising your return on marketing investment. If you’re unsure where to start, consider engaging a marketing consultant to help you develop a tailored strategy for your business. A clear plan will always outperform random acts of marketing.