Building a Marketing Budget
Building a marketing budget is a crucial step in establishing your marketing needs. A budget may sound like a kind of “leash” at first, but really, it’s a way to plan and strategise financially. A comprehensive, solid marketing budget will be able to equip your team to establish and accomplish the goals you set. Below, we have some things to consider while you are building your next marketing budget.
Align your budget with your goals
How you spend your money will be greatly influenced by what you want to accomplish. When you begin to plan your marketing budget, make sure that the only money that you’re spending is required by your current marketing goals. Whether that money is going to pay for ad space on social media or contract bloggers to bring in more organic search traffic to your site, you need to use your money as a tool to accomplish the goals you have set in place.
Know your sales funnel
An effective marketing budget requires you to deeply know your sales funnel, where you can track results through the revenue cycle. This can inform you on all the steps of the buyer’s journey and what it takes to convert a prospect to a customer. But this information can also inform more pieces of your budgetary elements. Consider some of the following elements of the sales funnel that should inform your marketing budget.
- Site visits per month
- Leads generated per month
- Leads converted to sales per month and what does it cost
- The typical value of a new deal
Know your operational costs
In addition to the sales funnel, it’s also vital to understand what your operational costs are. Knowing how much money it takes just to keep the doors open is essential to establishing your budget. Take into consideration the amount of time that your sales team is spending on converting leads to customers as well the potential costs of not pursuing leads. What would it cost to hire out a marketing agency? Does your current staff have the bandwidth to take on marketing efforts? Once you can track those everyday expenditures, you can then allocate your funds to where they need to go.
Marketing is an investment
The truth is, marketing shouldn’t be treated as an expense. Everything gets so much more difficult without a marketing plan in place. Without marketing, it’s much hard to meet quotas, make connections and generate sales to make your company thrive. When the top people of the organization start to look at things as an expense, they are much more willing to cut down on spending in those areas. And why shouldn’t they? The owners and leaders of your company are hardwired to save money, as opposed to spending it. But if you can convince leadership that marketing is an investment, it’s much easier to get the funds you need for your department. To do this, you simply need to justify why your organization needs to continue to be on the cutting edge of marketing trends. Once you can show that your department's efforts are worth investing in, it will be much easier to get the funding you need.