How Much Does Small Business Marketing Cost?

Marketing is a crucial part of running a small business, but the costs can vary significantly depending on the industry, location, and marketing methods used. CliquePrize® offers an affordable and effective way for small businesses to generate leads and engage customers through digital promotions. Below is an overview of marketing costs for US Small Business categories who often use CliquePrize® and how much they spend:

CliquePrize® provides an affordable alternative to traditional marketing channels. For example, the Giveaways (Platinum) Subscription (Plan B) costs $199 per month. For our model, lets suppose the Sponsor generates 100 leads per month at $1 per lead, significantly lower than many other lead generation methods and spends $100 per month on prizes to giveaway.

How To Write A Small Business Marketing Budget

Creating a marketing budget requires careful planning and an understanding of costs versus expected returns. With CliquePrize®, small businesses can estimate costs and expected conversions based on the number of leads generated.

Lead Retention & Messaging Strategy

With CliquePrize®, businesses can engage their leads consistently through email and SMS campaigns. Each month, Sponsors typically send 2 emails and 2 texts (or bi-weekly messages):

• 2 email messages
• 2 text messages

However lets assume 20% of leads opt out of marketing over time. That means only 80% of the leads remain subscribed each month.

Understanding Lead Growth & Retention

• New Leads per Month: 100
• Total Gross Leads in 12 Months: 1,200
• Lets assume an Opt-out Rate: 20% over 12 months
• Leads Remaining by End of Year 1: 960

Month-by-Month Lead Calculation

• Since opt-outs happen gradually, we need to calculate the cumulative leads each month, factoring in opt-outs.

Total Net Leads Retained On Marketing List Over Year 1: 960

Total Messages Sent in Year 1

Each month, the Sponsor sends 4 messages per lead (2 emails + 2 texts).

• Total messages per month = Retained leads × 4
• Total messages sent over 12 months:

Thus, over 20,000 messages are sent by the end of Year 1.
By optimizing email and SMS engagement, small businesses can improve conversions and maximize ROI using CliquePrize®.

Break-even & ROI Calculation

Let's carefully walk through the breakdown for CliquePrize® Plan B marketing budget, including all factors such as prize cost, lead acquisition, and the subscription fee. We will also factor in the sales profit and how to calculate the break-even point and conversion rates.

CliquePrize® Plan B Marketing Budget Overview

• Plan B Subscription Fee: $199 per month
• Leads Generated: 100 leads per month
• Cost per Lead: $1 per lead
• Prize Cost: $100 per month (lets assume this is the Approximate Retail Value (ARV) of the prize given away each month)

Total Monthly Cost:=$399 per month

Profit Margin For Most Popular CliquePrize® Small Business Categories:

Here are the estimated average profit margins for the most popular CliquePrize® small business categories:

1. Bars & Restaurants: 5-15% → Average = 10%
2. Hair Salons / Nails: 10-30% → Average = 20%
3. Gyms / Sports: 10-25% → Average = 17.5%
4. Party Centers: 5-15% → Average = 10%
5. Karate / Music Schools: 10-30% → Average = 20%
6. Dermatology: 20-40% → Average = 30%
7. Tanning Salons: 15-30% → Average = 22.5%
8. HVAC: 5-15% → Average = 10%
9. Bridal Shops: 10-20% → Average = 15%
10. Real Estate: 10-20% → Average = 15%

Average Profit Margin Calculation:

To calculate the average profit margin across all categories, we'll add the individual averages and divide by 10.

So, the average profit margin for these business categories is 16.75%.

This provides a clear ROI calculation, considering all relevant costs in the Sponsor's marketing budget.

Estimated Average Order Value (AOV) by Small Business Category:

1. Bars & Restaurants: $35
2. Hair Salons / Nails: $60
3. Gyms / Sports: $55
4. Party Centers: $250
5. Karate / Music Schools: $120
6. Dermatology: $250
7. Tanning Salons: $45
8. HVAC: $1,000
9. Bridal Shops: $1,200
10. Real Estate: $7,500

Break-Even Calculation:

1. Total Monthly Costs = $399 (this is based on a CliquePrize® Sponsor on Giveaways Subscription Plan B)
2. Profit per sale needs to be high enough to cover $399.

Clearly, half of these categories can do so on 1 (ONE) sale. The remaining 5 categories have lower AOVs:

1. Bars & Restaurants: $35
2. Tanning Salons: $45
3. Gyms / Sports: $55
4. Hair Salons / Nails: $60
5. Karate / Music Schools: $120

These are very reachable numbers even for those small businesses with lower Average Order Value (AOV). For these 5 categories, there would need to be a larger number of sales:

• Bars & Restaurants: ~23 sales
• Karate / Music Schools: ~20 sales
• Hair Salons / Nails: ~14 sales
• Gyms / Sports: ~15 sales
• Tanning Salons: ~18 sales

Calculate Required Profit per Sale

To break even on 10 sales per month, the required profit per sale is​: $39.90

So, each sale should bring in at least $39.90 in profit to break even in year 1

Calculate Required AOV For Break Even

We know that the Profit per sale = AOV × Profit Margin.

• The Average Profit Margin is 16.75% .
• Required AOV: $238.79

The viable Average Order Value (AOV) for this model to break even would need to be approximately $239 per sale, assuming a 16.75% profit margin and 10 sales per month.

This would allow the business to cover the $399 monthly marketing costs. If the AOV is lower than $239 (such as the 5 listed above), the number sales orders would need to increase but not drastically.

Maximizing ROI

To increase profitability, the Sponsor can:

1. Improve Email & SMS Engagement – Personalize messages and offer time-sensitive promotions.
2. Optimize Lead Retention – Reduce opt-outs by delivering valuable content.
3. Increase AOV – Upsell or bundle products to generate higher revenue per sale.

With strategic messaging and follow-ups, small businesses can maximize their return on investment using CliquePrize®.

CliquePrize®*** is the iPhone Giveaways mobile app that helps Small Businesses grow by reaching, nurturing and converting local, high value prospects. If you have any questions or feedback, please let us know!***