After everything we’ve endured over the last year, there’s no doubt that we’re all excited for what’s to come in 2021. Only positive vibes heading into the next twelve months, right?
Of course, the start of the new year also means it is time to take stock of your eCommerce marketing plan and make preparations. As an eCommerce brand, you’re probably looking ahead to how you’re going to capitalize on the boom in online shopping, which takes a bit of planning if you’re going to be successful.
So, where do you begin? With setting a proper eCommerce budget, of course. To help you make smart decisions, our CAKE team of eCommerce strategists has put together a brief eCommerce budget guide on what you need to keep in mind and what you absolutely shouldn’t forget.
Know Your Overall eCommerce Goals
Before you can start to calculate your eCommerce marketing budget for the year, you need to have a firm grip on your eCommerce goals. This includes looking at data from the previous year, deciding areas where you want to grow, and making firm decisions on how to get there.
For example, if your overall goal is to increase sales by ten percent, then you’ll need to dissect what’s needed to make it happen. This might mean increasing your ad spend for eCommerce PPC or creating a special loyalty program catered toward repeat customers.
Every brand has different benchmarks and goals, so it is important to choose ones that apply to your particular online stores marketing campaigns. You’ll also want to make sure they’re actually attainable. Then write them down and move on to looking at the economics of making it happen.
Understand Your Profit Margin
Next, take a look at your profit margin. This is generally done by seeing how much it currently costs you to purchase the product and ship it out. Determine your gross profit margin (GPM) by determining your net sales minus the cost of goods sold. Then divide that figure by your net sales again to figure out your GPM, which is essentially the profit you make and can reinvest in the business after every eCommerce order.
Once you have this number, you can determine what is necessary for operations and how much you currently have leftover for marketing spend. That alone gives you a good idea of your budget’s totality, which then allows you to start breaking it down into various categories, such as paid advertising or social media marketing.
Figure Out How You’re Going to Drive Traffic
Let’s face it; all of your goals hinge around more people coming to your website. Once you have a clear understanding of your profit margin, it’s important to decide whether you want to rely solely on organic traffic or dive into paid advertising (or even utilize a combination).
Some eCommerce brands rely solely on social media marketing. Others see the power of email marketing and want to work to build up a solid customer list. And some understand that content marketing is super powerful for really bringing in new customers.
No matter what you decide, make sure you take your overall total marketing budget and divide it into the various categories you’ve chosen. While we always agree that an omnichannel marketing approach is important, looking at the figures in this light should indicate which ones you want to put more financial power behind and the ones that are of lesser significance.
Putting Your eCommerce Marketing Budget Together
The next step in the process is to put your budget together. Formally put everything down on paper with a plan as to how much you have to spend on each marketing category for every time period in 2021. For example, you might choose a monthly budget or a quarterly budget. Be clear as to what your goals are.
By getting everything written down, you’re much more likely to stick to the budget. If there are extra funds available towards the end of the year, save them up for a big Black Friday or holiday sales push.
Find an Expert to Help You Accomplish Your Goals
Finally, you want to find an expert to help you accomplish your goals. While there are certain marketing tasks you can probably tackle on your own, it often costs more in terms of time and effort to try to handle these tasks by yourself. Instead, working with a dedicated eCommerce marketing team ensures results and helps you cut down on tasks that might not see a return.
At CAKE, we’re proud to help eCommerce stores from all over the globe accomplish their digital marketing goals. As you put together your eCommerce marketing budget for the coming year, we would love to help you find the best ways to grow your brand. Please contact us today for details.