Here’s what you should be spending—and how to make the most of your marketing budget.
It feels like a catch-22: As the owner of a small business, you’re most likely reluctant—and maybe feel too strapped for cash—to spend on marketing. “Some small-business owners know their businesses are, well, small. They cater to a local, close-knit community and rely mainly on word-of-mouth recommendations,” says Toby Cox, marketer for the ratings and reviews firm Clutch. “They don’t really see the point of devoting part of their budget to marketing.” But marketing is what drives revenue, not the other way around. It’s a crucial investment for your studio to grow. Just as you’d invest in a good floor, insurance for your studio, and talented, experienced faculty members, you should think of marketing costs as the foundation of a sustainable, thriving business.
How Much You Should Spend on Marketing
The Small Business Administration (SBA) recommends owners spend 7 to 8 percent of their gross revenue on marketing (if their net profit margin is between 10 and 12 percent, and revenue doesn’t exceed $5 million). Perhaps that figure sounds high. “It really depends on the individual business and owner, and their specific needs,” says Cox. “Maybe a dance studio is doing extremely well with free marketing tools and doesn’t feel the need to spend that much. But a newer, less established business could really benefit from allocating part of their income to marketing.”
How to Make the Most of Your Marketing Budget
We know you’re operating a small business (emphasis on “small”) with equally small profit margins. Here’s how to get the biggest bang for your marketing buck.
Develop a plan
Describe exactly what you’ll do to persuade potential students to enroll in your classes. The SBA recommends including the following in your marketing plan:
- Target market Who’s your audience? How big is it? What are their demographics? “For studios, it’s most likely parents of children,” says Cox. “What’s their generation? Their age? Their lifestyle?”
- Competitive advantage What gives your studio the edge over another one in your area?
- Sales plan How can parents spend money at your studio? Classes, apparel, private lessons, competition teams, workshops?
- Marketing and sales goals “Set quarterly goals of what you hope to achieve,” says Cox. “What are your key performance indicators—how will you know you’ve met those goals?” Do you want to increase your enrollment by a particular percentage or number? Build your followers on your studio’s Instagram account? Add subscribers to your digital newsletter?
- Marketing action plan What marketing channels will you use to reach those goals? “Think about who you’re trying to get in contact with,” says Cox. “What’s the best way to get in touch with that group of people? Is it e-mail? Social media? Direct mail?” What’s your pricing strategy for new students?
- Budget What does a complete breakdown of marketing costs for your studio look like? Keep in mind that this figure needs to cover not just costs associated with promoting your studio but also brand-developing costs, like maintaining your website.
Take advantage of free or cheap tools
Use MailChimp to send your e-newsletters (and drive website traffic), manage and plan your social-media posts in advance with Hootsuite and give your promotional images a professional look with the photo-editing software GIMP, for example.
Don’t put all your eggs in one (marketing) basket
Diversify the ways you market your studio. “Most small businesses use more than one communication channel to connect with customers,” says Cox. Remember, she says: Tailor your messages to the people you’re trying to connect with. Yes, social-media marketing might be an easy option, but it’s no longer a virtually free one— Facebook boosted ads and promoted posts on Instagram, for example, are all pay-to-play. Try expanding your toolkit, with search engine optimization, studio-branded apparel, community involvement and performances, Google Ads, open houses, birthday parties, partnerships with dance retailers, or tables at community events.
Track your results
“What metrics do you want to track?” asks Cox. “Analysis is important. Analyze whether you met these goals, and if not, what should you do next quarter?” Use tools like Google Analytics to track your return on investment—how effective your marketing strategy is—and then use that information to make adjustments. (Don’t forget to ask new students how they learned about your studio.)
Try a marketing budget template
The Bottom Line
Be patient. Remember that it will take time to figure out what marketing strategy is best for your studio and audience and then for your campaign to produce results. Track campaign results as you go along. Adjust your marketing budget—and how you spend it—based on this feedback. “Business is not an exact science,” says Cox. “There are so many different variables. Try not to get discouraged—keep thinking innovatively and critically about what’s important to your business.”
Rachel Rizzuto writes the Business column for Dance Teacher and is working on an MFA at the University of Illinois.