If you knew that for every dollar you spent on marketing you would get two dollars back, how much would you spend on that campaign?
EHHHHH!! wrong answer.
You would spend a BAGILLION DOLLARS!!
You’d spend everything you could get your hands on! You'd mortgage your house, your car and your kids! (Stolen from a presentation by Joe from Ajax Union-- thanks for your wisdome Joe!)
And yet, you aren't mortgaging your kids, now are you. Why not?
Because how much you should spend also depends on 2 things:
How much you want to make
If you “believe” in marketing
If you don't spend a lot on marketing, then you either don't want any more money, or you don’t believe it works.
It makes sense to not believe in "marketing", because it often doesn’t work. "Throw shit at the wall" marketing is where you spend money on random actions, like a mailer or a random newsletters, but have no clear goal or way of tracking it. Then, if you aren't magically wealthy after, you stop marketing completely and decide marketing doesn’t work.
Spend money to make money
The other kind of marketing, marketing that turns $1 into $2 (or $4, or $10) requires you to spend money and not get any in return at first (gasp!) and to keep going anyway (Badass). There are infinite ways to market, and every business is going to benefit from a particular recipe of ingredients. Like a cake without enough sugar and too many eggs, it won't taste good if you don't find the right mix for your business.
Joe Schmo might benefit more from networking meetings, but Ms. Peabody with her new cosmetic product won't see any return networking. You can make some educated guesses, but until you test and track, and test and track, again and again, you won’t know.
Once you test and track, you will find out there is a magic formula for your business that will multiply your marketing dollars.
If you invest the time and money into finding out where you make not just a decent profit, but the highest return, then you can start shoving as much money as you can in that direction and feel confident about the dollars you will get back. And when you commit and support this ecosystem overtime, the benefits will grow exponentially.
But you must invest money and time to find that magic recipe.
If you find that magic number for dollars in and dollars out, then the sky is the limit. You have a slinkey that you can expand and contract as you wish based on the amount of money you want to make and the lifestyle you want to lead. And that information, the knowledge of what marketing actions can turn x into 10x, greatly increases the value of your business to potential buyers, should you ever decide to sell your business and go live on a beach somewhere.