Sometimes it’s difficult to understand how marketing works. There’s a range of activities done in a way that’s hard to see and measure, creating visibility and engagement across your website and social media, which in turn somehow brings in leads.

But it’s vital to your business that you do see, understand and measure such activities. They’re not, in fact, intangible, and bringing clarity to your marketing spend and activities will help your business bottom line.

A results-focused marketing strategy is key.

Understand what you’re spending

The first step is to take stock of what you’re currently spending on marketing. Consider the costs of various marketing tools, if you’re undertaking ad spend, as well as contractor or outsourced agreements.

The goal is to get a big picture understanding of your marketing spend. Consider also how it changes from month to month, and the relative cost of marketing compared to other areas of the business.

Spend what you should

It’s hard to know exactly how much of your business spend should be on marketing. For small businesses, marketing should be linked to revenue – spend a percentage of revenue as it shifts over time. For big businesses, it’s better to link marketing to gross profit, and it’s not uncommon to spend up to five per cent of profits on marketing.

For online, the lack of a physical store means you may have to market further. Up to 10 per cent of total revenue is often spent on marketing in some online businesses, as marketing is one of the primary mechanisms an online business becomes visible.

Have a business purpose

It’s vital to understand the purpose of your marketing. Without doing so, and tying the activities you undertake to that purpose, marketing efforts will be meaningless.

Purposes can include growing visibility, bringing back return customers, enhancing reputation or public image, or increasing conversion. For each of these, particular activities and metrics of success should be applied.

Then, analyse and adjust as your purpose and business position changes to maximise your spend’s effectiveness.