Determining a Marketing Budget for Your Craft Brewery
It takes a lot of passion and commitment to launch and run a craft brewery. You might believe in the exceptional quality of your product and the uniqueness of your establishment. But so do the other more than 9,100 craft breweries operating in the United States.
It’s important to remember that your success isn’t dependent on how much you believe in your business but rather on your ability to cultivate and capture brand loyalty. A well-executed marketing strategy will be the key to getting customers through your door and keeping them coming back. And that starts with your craft brewery marketing budget.
What is a Craft Brewery Marketing Strategy?
Your craft brewery marketing strategy is the step-by-step process detailing how you plan to get your message out to your target audience. This strategy will be the foundation of your business’s survival and growth.
Think of your marketing strategy as your first impression and continuing conversations with the public. You not only want to attract new customers through your marketing but also create brand loyalty, so those customers keep coming back for more and even recommend you to others.
But your marketing strategy may not be the same as the craft brewery down the street. You’ll need to ask yourself some important questions like — What makes our brewery unique? What does our target audience value? How can we best showcase our brand identity to attract new customers? And executing that strategy is going to cost a few dollars.
Have You Created a Brewery Business Plan?
Ideally, creating a detailed craft brewery business plan is something you’ll want to consider before you move on to outlining your marketing budget. This is because your business plan will include things like:
- Industry Overview
- Your Mission and Vision Statement
- SWOT Analysis
- Market Analysis
- Startup Budget
- Expansion Strategy
Once you’ve put all this detail in writing, you’ll be in a better position to drill down into your sales and marketing strategy. Whether you have a business plan in hand or not, you probably have an idea of who you’d like to reach as your target audience. With some other key figures on hand, you can also make an excellent start on an effective marketing strategy and budget.
How Much Should Your Craft Brewery Spend on Marketing?
Before you start deciding where you’re going to spend your marketing dollars, you need to calculate how much of your overall budget you will allocate to marketing. As a general rule, most restaurants and breweries spend between 3% and 10% of their sales on marketing. Depending on your level of comfort handling things like social media marketing, that figure could fluctuate.
Creating a Marketing Budget for Your Craft Brewery
Just like the money you set aside to buy equipment, bottles, and hops, you need funds to create and execute a successful brewery marketing plan. How much your craft brewery should spend on marketing will depend on the size of your business and its goals. Because creating a marketing budget can be confusing and challenging, here are a few ways you can plan this important investment.
Calculate Your Gross Revenue
First, calculate your gross revenue for the past 12 months. This is your total sales before taking deductions for things like taxes, costs of goods sold, rent, etc. If you haven’t been in business for a full year, you can use your projected revenue figure for the next 12 months.
Determine Your Product Life Cycle (PLC)
Businesses in the start-up and growth phases, meaning those in operation for five years or less, should be focusing on building brand awareness. Businesses that are in the advanced growth or maturity phases, meaning those in operation for five years or more with considerable market share, should focus on brand differentiation and overall market share growth.
Figure Out Your Marketing Budget Allocation
It might sound counterintuitive, but less established brands should plan to spend more of their overall budget on marketing. In the initial startup and growth phases, an ideal figure would be closer to the 10% figure of gross revenue for marketing. If you think about it, your brand needs to divert the attention of consumers away from more established brands to your business. This is going to take some effort.
For brands that are in advanced growth and maturity phases, you may be able to spend slightly less depending on your market and goals. But if you haven’t focused on marketing in the past, your experience may vary.
Map Out and Prioritize Your Marketing Activities
Once you’ve settled on an overall figure, it’s time to map out and prioritize your marketing activities. Some things, like online ads, will cost more than others, like social media marketing. But cost shouldn’t be your only consideration because some forms of digital marketing, like having an engaging website that is SEO-optimized, are vital to the success of your overall marketing strategy.
Track Your Marketing Results
Every marketing activity you choose is an investment, not an expense. These strategies are meant to boost the revenue of your craft brewery business. If they don’t produce results, you should figure out what’s not working and make adjustments.
Before you launch your marketing campaigns, identify some key performance indicators (KPIs). Keep track of your total marketing spend against these KPIs to ensure you are getting the results you need.
Let Too Darn Loud Marketing Help Elevate Your Craft Brewery’s Message
Craft breweries need to think early and often about their marketing strategies. Given the financial realities of this business, they also need to consider how to allocate limited marketing dollars to a tight budget. But those dollars can go much further than you think.
At Too Darn Loud Marketing, we don’t take a cookie-cutter approach to digital marketing, meaning we’ll never recommend a service that you don’t need. Every craft brewery is different, so we take the time to understand your brand and its target audience.
Your particular marketing budget will affect your outreach efforts and branding strategy. Our digital marketing experts will help you make the best use of those marketing dollars, so you get the results you need. Contact us today to schedule a free initial consultation.
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