4 keys to creating a marketing budget that gets results
Don’t look now, but you’re about to start the first quarter of a new year. A new year means new customers, new sales targets and new opportunities to grow your business. It’s an exciting way to start the year, but it won’t last long if your marketing budget isn’t right from the start.
Many companies plan their marketing budget based on the previous year and how much they are willing to spend on marketing. It’s a great way to keep you from hitting your sales targets or overspending on wasted effort.
Want to get your money’s worth? Here are four essential keys to planning and implementing a marketing budget that gets results.
1) Start with a marketing strategy
Before calculating your marketing budget, align your marketing goals with your company’s strategic goals and growth vision. If you plan to grow 20%, but only want to invest enough in marketing to get new business cards for everyone in your business, you’re probably going to be disappointed with the results of your investment!
It is important to develop a written marketing strategy that your management team, your sales team and your marketing team are on board. You need everyone to drive their activities in the same direction.
2) Define your marketing budget
Once you’ve aligned your business goals with your marketing goals, you need to identify your marketing budget so you can develop a detailed marketing plan that supports your strategy. Basically, you will have the choice between three options:
Lean plan: 1 to 2% of your turnover. Essentially, you are committed to engaging and retaining current customers with simple tools and strategies. This is ideal for companies looking to maintain their position in the market and do not have ambitious growth goals.
Target plane: 3 to 4% of your turnover. The goal here is to attract new leads and retain current customers with advanced tools and strategies. This is ideal for companies looking to increase market share and have moderate growth goals (10-15% annual growth).
Stretch plan: 5% or more of your turnover. Your goal is to accelerate your results by applying more resources focused on lead generation, conversion, and sales. To do this, you will use complex marketing strategies and advanced tools. This option is ideal for companies that have ambitious plans for growth and increasing their market share (annual growth of 20% or more).
3) Allocate your marketing budget
Armed with your goals and a budget, you can now get down to business by developing a tactical plan to turn your marketing dreams into reality! The complexity of your plan will depend on the marketing budget you have identified, but you should also consider including tactical plans related to:
- SEO and paid advertising
- Social Media
- Content, Blogging, and Email Marketing Offerings
- Lead conversion and nurturing
- Traditional advertising
Determine how much of your marketing budget should be allocated to each aspect of your plan. The table below is based on a recent survey conducted by Forrester Research. It displays the percentage of B2B companies’ marketing budgets that have been allocated to each area of their marketing plans. You can decide to spend more or less based on what your direct competitors are spending, your industry, and your specific goals.
4) Set up a marketing budget plan
Once you have developed a plan that supports your business goals, you need to implement it. And to ensure a successful implementation, you need a team of skilled marketers, designers, and technical experts. You have several options for creating such a team:
Internal marketing team
To execute a complex marketing plan, you need a team of people with skills in copywriting, coding, design, social media, paid search, and SEO. Unfortunately, there is no single person capable of doing all of these activities effectively.
Large companies often hire an in-house team, but specialists can be expensive. The benefits, training and equipment alone could easily cost up to $500,000 per year. For most small businesses, this is not an option.
Independent team
Freelance employees can be a good choice for individual projects. Marketing-skilled freelancers can help fill in the gaps that your marketing manager can’t, and they can save your life in the blink of an eye.
But when you’re trying to pull off a complex, long-term marketing plan, you’re likely to experience a series of project stops and starts. Because they work on demand for multiple clients at once, they may not be as available as you need them to be. You may need to hire additional people to cover all the roles needed to execute your plan. Plus, there’s the coordination and communication time you’ll need to put in to manage all the freelancers. And when a freelancer leaves, they take all the knowledge of your project with them, forcing you to start from scratch.
Virtual marketing team
Using a marketing agency has several advantages:
- Services from top notch marketing experts without incurring the costs of hiring, training and managing multiple in-house employees
- Empowering a team that wants to succeed and prove the value of their marketing services
- Predictable costs because your marketing expenses are based on monthly fees
Hire a virtual marketing team usually involves an investment of $60,000 to $150,000 per year, which is significantly less than the cost of an in-house marketing department. However, your team is offsite, which means communication can sometimes be a little slower and you may need to work via conference call. Plus, since marketing teams have multiple clients, you won’t have to claim their time every minute of the business day.
Hybrid Team
The best solution might be a hybrid of a small in-house marketing team dedicated to one or two key tasks, complemented by an agency team that complements your marketing efforts. And the agency can usually provide best practice training and guidance to your staff, freeing you from that responsibility. Make sure everyone is clear on their roles and responsibilities, agrees on metrics, and commits to sharing a vision for success. This can be a very effective approach to implementing a solid marketing plan!
