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. A robust strategy helps identify unique selling propositions and position your business effectively. Newer, rapidly evolving markets demand agility and continuous strategic refinement.
• 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 strategic initiatives.
• Channel Complexity: The more channels you utilise – social media, email, search, content marketing, etc. – the more important a cohesive strategy becomes. Siloed channel efforts waste resources and dilute your message.

For most Australian SMEs, we recommend allocating between 5% and 15% of your overall marketing budget to dedicated strategy work. This isn’t a hard and fast rule, but a useful guideline. This spend covers things like market analysis, brand positioning, customer journey mapping, and developing a documented marketing plan. Don’t view this as an expense, but as an investment that amplifies the return on all your other marketing activities.

The businesses that thrive in the coming years will be those that prioritise strategic thinking. To get started, we suggest conducting a thorough audit of your current marketing efforts and identifying the gaps in your strategic understanding. A focused investment in strategy now will pay dividends in increased efficiency, improved customer engagement, and ultimately, sustainable growth.