I was watching an episode of Shark Tank that Lori Greiner (known as the "Queen of QVC" and “Shark with a Heart”) appeared on, and she was lamenting an inventor’s poor business strategy. The inventor was more consumed by suing knock-off competitors than building a brand.
Greiner suggested to the inventor that, instead of litigation, she should shift her focus to brand awareness, growing her market share and bringing new products to market. She and the other Sharks were shocked to find out the inventor had spent $0 on advertising.
While you likely know you need to advertise and build your brand, you may not know how much to budget for advertising or where that money should go. Here are some tips to help you get started.
How Much Should You Spend?
There are countless recommendations for calculating how much you should spend on advertising. Some say a conservative 1% of revenue. Others push the envelope to as high as 8% of revenue, dependent on your net profit margin. In truth, there is no magic number. It depends on the size and competitiveness of your market, and how many units you need or want to sell.