K
eeping up with the right marketing tactics for your business can be challenging. Marketing is largely a numbers game, where the winning strategy is to find not only the right amount for your overall marketing budget but also the right mix of tactics to reach your business goals.
No two campaigns are alike (or at least, they shouldn’t be) but rather designed around unique factors like audience, analytics, and KPIs. And if you’re a luxury brand, there are additional considerations, such as the brand’s premium positioning, exclusivity, and focus on high-quality customer experiences.
There’s no magic formula or template when it comes to marketing budgets and mixes, but here are some industry-typical guidelines to get you started:
According to Deloitte’s most recent survey of CMOs, companies across the board spend an average of 10% of their overall budgets on marketing, which is only slightly higher than a pandemic-era low of 9%. Of the total marketing budget, around 9% is dedicated to digital marketing, 16% on social media marketing, and another 20% on marketing tech.
Typically speaking, the marketing channels with the highest ROI in 2024 have been social media shopping and website/SEO marketing (both at 16%), followed by email, paid social, and content marketing (all at 14%.) It’s clear that no one channel stands out above all the rest as a sure-fire campaign win — so which mix is right for you?
Luxury Marketing Budgets
While the foundations of strong marketing remain the same across the board, luxury businesses and brands need to consider additional, unique factors, such as exclusivity, rarity, brand perception, and a smaller circle of potential customers. They may also need to consider that some forms of marketing that might feel dated to other brands are still necessary to reach an affluent, older audience. In these cases, it’s recommended that luxury B2C companies invest more than the average — around 12-20% of their revenue — into marketing, and B2B companies invest around 8-15% of their budget into marketing. (If you’re a high-growth brand, 20-25% is a better target.)
Within those budgets, you’ll find two main types of marketing buckets. Performance marketing has the goal of soliciting a direct response from a customer, whether that’s booking, signing up for a newsletter, or scheduling a consultation (these are the imperative calls-to-action, like Buy Now, Book Today, or Sign Up). This type of marketing is data-driven, making the results easy to track, monitor, and analyze.
The other type of marketing is brand-related, which focuses on engagement, awareness, reach, and reputation building. This form of marketing, which includes content marketing, social media engagement, and influencer marketing, is a little less tangible but nonetheless essential to building authentic, emotional connections that build trust and loyalty.
The key to a strong campaign? Finding the right mix of both.
A Sample Marketing Mix to Drive Conversions
Your ideal marketing mix will depend on what type of business you have and what your objectives are. For this example, we’ll use a metric that luxury businesses of all stripes find important: conversions. To achieve this essential KPI, here’s one way you might slice up your marketing budget pie.
Digital Marketing (55%)
The breakdown:
- SEM, PPC, and SEO: 25%
- Social media: 15%
- Content marketing: 10%
- Email marketing: 5%
Because it’s such a ubiquitous part of our lives, digital marketing should take up around half of your budget. Within this subsection, strong conversion tactics include search engine marketing (SEM) and pay-per-click advertising (PPC), both of which use keywords and targeted search-engine ads to engage luxury shoppers. They should take up about 15% of the digital chunk of your marketing money, with the other 10% of this category going toward search engine optimization (SEO). A strong SEO strategy — broken down between on-page and off-page SEO — is one of the best ways to ensure that people searching for venues like yours find your information as easily as possible.
Social media marketing should also get around 15% of the spend, with a focus on visually-driven platforms like Instagram, Pinterest, and Facebook. Tactics like carousel ads and short-form videos create exclusivity and a desire for belonging. Plus, influencers who target luxury consumers can bring authenticity to the brand. Content marketing (around 10%), such as blogs, videos, or partnerships with industry magazines, offers the chance to tell your unique business story, show off your craftsmanship or legacy, and give customers a peek behind the scenes. And finally, email marketing (5%) can be used to create personalized campaigns based on past booking behaviors, customer preferences, or seasonality.
The majority of these tactics are performative, although some brand-building happens in digital marketing as well, especially when it comes to building a community online and engaging with followers on social media.
Public Relations (15%)
The breakdown:
- Press releases and media features: 5%
- Influencer marketing and partnerships: 5%
- Trade shows: 5%
These are traditional brand-building marketing tactics designed to reinforce your luxury positioning and increase awareness to wider audiences. Public relations tactics, like mentions or guest articles included in high-end lifestyle magazines, can help elevate your brand perception to a discerning audience. Influencer marketing can also fall under this category, especially if your chosen partner is a well-known lifestyle blogger, luxury travel influencer, or someone affiliated with a related magazine.
Luxury trade shows, which can either be B2C or B2B, are great opportunities for networking with professionals in your industry, expanding your reach, seeing what the competition is up to, and showing off new products and services.
Branding and Creative (10%)
The breakdown:
- Photography and videography: 5%
- Website maintenance: 5%
Although it’s a small part of the overall marketing mix, it’s important to invest in high-quality photographers and videographers who can not only showcase your business’ luxury appeal, but do it in a way that’s authentic, real, and lets potential clients picture themselves doing business with you.
Another small chunk of the budget should go toward making sure that your website remains up and running without issues.
That said: In addition to, and separate from, your overall marketing budget, it’s essential to invest in making your website the centerpiece of your entire online operation. It will be the destination for most (if not all) of your CTAs, and especially for luxury brands, customers expect slick design, intuitive functionality, and little to no downtime. To guide you in this important process, please check out our website series, starting here.
Offers, Promotions, and Partnerships (15%)
The breakdown:
- Limited time offers: 5%
- Loyalty programs/referrals: 5%
- Brand partnerships: 3%
- Vacation planner partnerships: 2%
This subcategory includes promotions like limited-time offers and loyalty programs and referrals. These are part online and part offline marketing, since digital channels are used to promote real-world offers. For example, exclusive packages that bundle med spa services or wedding ceremonies and receptions can be promoted through email marketing, social media, and PPC campaigns. Loyalty programs offer incentives for repeat business and referrals from happy customers; special offers for loyalty members build trust and encourage repeat business.
Another small piece of the marketing puzzle is partnering with fellow luxury brands for co-promotions – a wedding venue with a bridal dress designer, for example, or a high-end event space with a limo service. Collaborations can also extend to local businesses, such as wineries, golf clubs, or cultural institutions, to offer exclusive, VIP packages. Finally, you can expand your reach by building relationships with luxury vacation planners who specialize in booking premium experiences for their clients.
Experiential Marketing (5%)
Finally, allocating a small portion of the budget to experiential marketing hits on the hot trend of consumers seeking immersive experiences. Some examples include hosting exclusive events, pop-up experiences, or even virtual tours that highlight your company’s ambiance and style.
Prioritization Strategy
This example plan is just that — an example. Many times, though, budgets get slashed or tactics don’t get approved. In those cases, how do you triage your strategy?
- The straightforward answer is to go with what’s already working the best. Focus on your high-ROI channels and tactics that have already seen the best results.
- Prioritize digital marketing tactics like SEM/PPC, social media, and email marketing, all of which can be carefully targeted and drive direct bookings.
Note: This advice is based on campaigns that are intended to drive conversions. If you’re looking to expand your reach, reinvent your brand, or drive engagement, your priorities will be different: tactics like public relations, events, and high-end partnerships are more effective at growing both reach and loyalty.
All these numbers can feel overwhelming — that’s why our experienced team is here to help you create the perfect marketing mix for your brand. Contact us and let’s work together!