How to Set a Goal-Driven Marketing Budget
There comes a time when trial and error or guesswork are not effective ways to plan marketing budgets. If you are feeling overwhelmed or without a paddle when setting budgets, guess what? It’s totally normal. In fact, when you are unsure it is best to recognize it sooner than later. Random or spontaneous budget decisions often are not realistic and can ultimately affect your company’s efficiency and profitability.
It is helpful to take advantage of any available resources or guides to assist you in budgeting. For example, let’s talk about marketing. Setting a marketing budget is made up of various factors and it needs to be linked to performance or goals.
Is your business a startup or an established business? As a startup entering the market you may need heavy-lifting to penetrate or make your business known. If you are an established business you may already have some degree of reputation, whether it be with existing clients or partners and therefore your budgetary needs will be different.
Startup vs established business.
Greater expenses tend to occur in the early stages of a business. Companies in this phase typically find themselves investing in brand identity, positioning and strategic messaging – possibly hiring experts to help go-to-market.
An established business may already have those assets in place and are searching for new strategies to help expand beyond their current audience either by paid advertising or broadening their organic efforts.
It’s key to understand where you are in your business’ marketing before stamping a cost to that department.
Determine all marketing activities that support the sales funnel.
No matter where you are in the budget process, it’s important to write down all of the marketing activities that play a role in your prospect and/or client experience. If you are just starting, it’s crucial to begin this exercise by reviewing your sales funnel and building marketing activities to support it.
When you begin to outline your sales funnel and marketing activities, you’ll understand how your clients initially find you, what information they request before they buy and the major factors that influence their decision to work with you.
Defining your sales and marketing activities will help you to correlate your budget to your process and answer questions likeWhat does it take to acquire a new customer?” This eye-opening process will help inform your marketing budget.
Set revenue goals.
Without a goal, you are simply shooting in the dark. By establishing your sales goals and sharing them with your marketing department you will begin to answer questions such as ” How many sales or new customers do you need to hit your goal?: and “What is your sales conversion rate and how many leads does it take to hit your numbers?”
Your revenue goals help guide your marketing efforts and budget. This may seem elementary for some, but many growing businesses operate without a firm and intentional budget. While random marketing activities may get you started you need to ask if they are effectively driving you closer to achieving your revenue goals.
Establishing a goal-driven marketing budget provides your company with measurable insights allowing you to operate with purpose and to know when it’s time to dial up or pivot your marketing.
At BOS Digital we help businesses build marketing plans and budgets. If your company needs help getting started or evaluating your current efforts let us talk. Contact us today for a complimentary consultation.