3 steps to help you plan for 2021

Development of your marketing budget

Budgeting can be a difficult process in a normal year. Many organizations estimate their marketing budget based on the previous year’s budget and mark it up by a percentage. 2020 has brought relentless changes, which can make the budgeting process more complex than ever. The business environment has changed, as a PSP or vendor your direction may have changed and your approach to the market and the tools you use have definitely changed.

Here are three steps to defining your 2021 marketing budget

1. Revenue-Based Planning
   A business should take into account several considerations when determining its budget. The size of the business, your growth forecasts, new product launches, the markets you currently serve and new markets you are entering. All of these things will impact your budget. Consider these two guidelines, as there are no hard and fast rules for budgeting (your requirements will vary depending on the specific objectives of the organization):
   • 12-20% (of net sales) for new entities seeking exposure
   • 6-12% (of net sales) for established organizations
2. Three areas of revenue generation: customer retention, growth, acquisition
   From a marketing perspective, you will need to deploy tactics and strategies in each of these areas to generate revenue. Depending on your business growth goal, up to three areas require resources and budget:
   • Loyalty of the clientele, keep those customers you’ve worked so hard to acquire. Plan loyalty programs. Loyalty leaders in their industry grow revenue approximately 2.5x faster than other companies.
   • Customer Growth, expanding the products and services your customers buy. Cross-selling offers through multi-channel programs are effective.
   • customer’s purchase, increase your market share by expanding your customer base. This is the most resource-intensive budget area. Raising awareness is expensive and a longer process.
3. Expenses
   Costs include, but are not limited to, the following and should be included in the marketing budget:
   • Multi-channel awareness programs
   • Website Updates
   • Content creation – case studies, videos, etc.
   • social media
   • Sample kits
   • Events – onsite and on the web
   • Specials
   • CRM services
   • Loyalty programs

Your budget has a limit. You will likely need to consider and estimate the costs of internal resources for their time and external resources with service fees. Use it well.

As you track your progress and evaluate the effectiveness of the program throughout the year, continually review your budget. Track marketing spend on a monthly or quarterly basis to evaluate programs and revise strategies.

Just like your marketing strategy and marketing plan, communicate with your team. Inform other departments of your planned programs. Considering a new CRM? Engage with sales and customer service as a CRM will impact their industry.

2021 is sure to be a year of highly creative programs with associated budgets to grab the attention of prospects and customers.

Not sure where to start your marketing budget? Is it time? Visit my website, KimberlyMeyers.com or call me directly at 646.320.8854 for more information. Let’s connect.