It truly is a great time for digital marketers. With a variety of marketing software solutions available, it’s never been easier to automate tasks and reach your audience more effectively.
However, just because these solutions exist doesn’t mean you should use them—or pay for them.
Depending on your needs and business model, you might only need a handful of platforms. Unfortunately, many businesses invest in too many solutions or pay more for a product with more features than they really need.
Keep reading to discover five signs you might be paying more than you should for your marketing software.
1. You’re investing more than 10% of your revenue in marketing software
Marketing is key to growing your brand and finding new customers—but you shouldn’t sink all your money into it.
Business experts often adhere to the 5% rule which means your marketing budget should be roughly 5% of your revenue. B2B businesses should probably spend a little less (2% - 5%) while B2C businesses should spend a little more (5% - 10%).
These rules aren’t hard and fast, and your spend will likely fluctuate from year to year. For example, in the first few years of your business, you’ll need to spend more on marketing to gain new customers. And later on, once you have more brand recognition, you can likely dial back spending a bit.
With all that said, if you’re investing more than 10% of your revenue in marketing software, you might be spending too much. If you find yourself over this mark, ask yourself the following questions:
Are you confident the money spent on your marketing software will result in leads and sales?
If your revenue dips unexpectedly will you be able to cover the costs of your software?
Will this investment in marketing leave other areas of your business strapped for cash?
Make sure to take your answers to the above into consideration when determining how much you should pay for your marketing software.
2. Paying for features you’re not using
We’ve all been there. You get sold on a shiny new piece of marketing software with the latest and greatest features. You think you’re going to use every piece of tech the new software has to offer, but in the end, you only use a fraction of its capabilities.
Of course, if the software is delivering the results you want, you might not care. But wouldn’t you rather pay less for the same results? Maybe you could switch to a lower-tier plan that only includes the features you need. Or perhaps there’s another solution out there that’s better tailored to your needs and costs less.
If you’re currently using a piece of marketing software in your business, perform an honest assessment to determine how many of the features you’re actually using. If you find you’re only using half the features or less, there’s likely a more affordable option that wouldn’t cause you to lose any of the tools you need.
3. Overlapping capabilities
The only thing worse than paying for features you don’t need is paying for the same feature twice. This can happen when you have two pieces of marketing software that share one or more features.
If you’re using all of these software solutions it’s quite possible you’re paying for one feature multiple times. While that’s frustrating to think about, it also presents the opportunity to cut down on your marketing costs.
Review all your marketing software to see if there are any services that overlap. It’s possible that you might be able to remove an entire subscription because all of those features are included in your other software packages.
4. Poor return on investment
Marketing software is only worth it if it makes your business money. If it doesn’t, then you’re probably overpaying.
This is why it’s important to analyze the return on investment (ROI) of all your marketing software to ensure each one is pulling its weight. To do this, calculate how much revenue a piece of software has generated (depending on your data you might need to estimate this number) and then divide that by the cost of the solution.
So, if you pay $50 per month for software and that software generates $100 for you each month, the ROI is 2:1.
Ideally, you want your ROI to be around 5:1. Remember, there are other costs associated with your business. So even if your marketing software is generating an ROI of 2:1 your other costs might mean you’re only breaking even, or losing money.
If you determine your ROI is too low there are two possible reasons:
Your software isn’t generating enough revenue. Maybe your solution doesn’t fit your needs or doesn’t have the tools necessary for you to be successful
Your software is too expensive. Your solution is generating a good return, but the cost is too high and is eating into your profits.
Basically, to raise your ROI you either need to increase your revenue or lower your costs. If you believe your revenue is maxed out then you’re going to need to cut costs—and that might mean finding a more affordable piece of marketing software.
5. Not taking advantage of more affordable options
Simply put, just because a software solution is more expensive doesn’t mean it’s better. There may be marketing software available that’s similar to what you’re currently using, but for a much better price.
With this in mind, it’s a good idea to occasionally survey the market to see if there are more cost-effective options than your current solution. You might be surprised just how much prices can vary. For example, here are the base offerings of some of the leading landing page builders:
Those are some pretty big differences in price. Granted, the features between each offering also vary widely, but if all you’re really looking for is a landing page builder why pay more for tools you don’t need?
When you’re evaluating software, be honest with yourself about which features you actually require. Something might sound cool, but will you really use it? Review your other software as well to see if there’s any overlap in toolkits. That way you know you won’t pay twice for the same feature.
Finally, remember that just because a piece of software offers a long list of features doesn’t necessarily mean it’s better. Sure it does more, but software that tries to do too much often ends up just being average at everything.
You’re usually better off choosing a solution that focuses on a few key features and does them all exceptionally well.
How much should you pay for marketing software?
At this point, you’re probably looking at your marketing software bill and wondering what you should really be paying. The truth is, it depends on your unique business needs. Some businesses can get away with paying less, while others will have to pay more.
That being said, there are four marketing tools that are essential for virtually every online business:
Website builder
Landing page builder
Email marketing platform
Analytics
So, how much should you pay for these four?
Website and landing page builder: $74/month
First and foremost, when you’re building an online business you need a website and landing pages so you have somewhere to direct potential customers.
While you can purchase these two builders separately, there are many marketing software solutions that offer both. This is one instance where it makes sense to bundle them together, as it will make connecting your website and landing pages easier. You’ll also end up saving money this way.
If you need to get your business online and want to have the tools you need to grow your customer base, Leadpages is an excellent (and affordable) choice.
Email marketing: $30
An email list is an essential tool for any online business owner. This is where you can nurture leads and turn them into customers, and engage existing customers to ensure they continue to buy your products and services.
After surveying the email marketing industry, you’ll find that you can get all the necessary features for around $30. Just take Campaign Monitor’s Unlimited Plan. For $30 you get email templates, list segmentation, automated delivery, and unlimited emails.
For most businesses, this is everything required to stay in touch with your audience and take full advantage of the benefits of email marketing.
Analytics: Free
No matter what marketing strategies you’re using, you’ll need a way to track whether or not they’re working. That’s where analytics comes in—and luckily there’s an excellent software solution for this that’s completely free.
Google Analytics provides you with a wide range of data, including:
Page visits
Unique users
Traffic sources
Conversion rate
User data (device and location)
You can view these stats for your website as a whole, specific pages, or individual campaigns.
For most businesses, this is all the data you’ll need to make informed decisions about your marketing. If you want additional analytics that Google isn’t able to provide, shop around and ensure that extra data is really worth what you’re paying for it.
Other marketing software to consider
In addition to the marketing software above, you might find you’ll need a few more tools to run your business effectively. Here are the other pieces of software that you may require and what you should expect to pay for them:
Customer Relationship Management (CRM): If your business revolves around customer service and a more personalized sales approach, then a CRM is probably a good investment. However, if you don’t plan on dealing with customers directly, an email marketing platform will probably suffice. Expect to pay around $60 per user per month for a CRM.
Social media management: When you get to the point where you’re posting on multiple social media platforms every day, a social media management tool starts to make sense. This will save you time and allow you to post on multiple channels at once so you can get back to other business tasks. Expect to pay around $50 per month.
Scheduling management: If you do a lot of customer consultations or find you’re meeting with partners several times a day then a good scheduling tool is definitely worth it. Expect to pay around $8 a month.
Of course, there are plenty more types of marketing software available. Just because we haven’t listed a type of software here doesn’t mean it’s not useful for the right businesses. What we’ve included here are simply for most common and essential tools.
So, how much should you be paying for marketing software?
Based on our findings, most small businesses can expect to pay anywhere from $100 - $300 per month for marketing software.
Does that mean if you’re paying more than this you’re paying too much? Not necessarily. If you’re utilizing all the features at your disposal and your software is providing you with a good ROI then your investment is very much worth it.
But if you’re not using your software to its full potential and you’re not happy with the results then reducing your spend and looking for more cost-effective options is a wise decision.
Start by re-evaluating your website and landing page builder
The cost difference between website and landing page software is sizable, so if you’re looking to cut your marketing costs then this is a great place to start. Leadpages starts at just $37 a month and includes:
Over 200 conversion-optimized website and landing page templates.
