It’s indisputably one of the most crucial aspects of a business’s budget. With the focus on a strong finish for 2015 though, the time to properly plan and prepare for 2016 may have slipped away. Stop now – making the time for smart, purposeful planning will give your 2016 marketing strategies a great shot at success.
The first hurdle to tackle is the crucial “How much do we spend?” question.
Budgeting for marketing expenditures must focus on:
1. Strategy – There’s no room for the “fly by the seat of your pants” method. Rather, create and implement a plan that uses past data, current conditions and future predictions to pull together a strategy.
2.Measurable ROI– Each aspect of the plan should be trackable to a certain degree to determine its value.
3. An adjustment mentality – Some avenues of marketing will produce terrific results. Others will be a bust. A willingness to make fast adjustments and having a “back-up” plan are both advisable. If you’re intent on success, that is.
So, how do you go about establishing a budget?
A Chief Marketing Officers survey found B2Bs typically spend between 7-9% of their revenue on marketing—an increase over previous years—while the 9% spent by B2C’s remained nearly unchanged.
Recent trends concerning the relationship between budget allocations and revenue growth goals for B2Bs has resulted in this general marketing budget guideline: invest 20% of an overall revenue growth goal.
Say your $1 million grossing company’s goal is to double revenue to $2 million over the next 3 years. That calculates to a marketing expenditure over that 3 year period of $200,000 (20% x $1 million) or $66,666.66 per year.
Competitor ABC across town may spend XXX dollars on marketing, and while it gets under your skin to know ABC is putting more buck behind their product/service, basing your advertising budget on what a competitor spends is not a sound business practice. Your marketing allocation must be based on your company’s financial details—the past, the present and future projections—and particulars specific to your company. A one-size-fits-all strategy doesn’t exist.
Determine how much your company makes each month, taking into consideration the range that makes up the monthly averages. Base your marketing budget on the lower of those monthly revenue figures as this is the safest figure to ensure against overspending.
Adopt the mindset that recognizes money spent on marketing as an investment rather than an expense. Because that’s what marketing dollars truly are—an investment in your brand and the company’s future. Such an attitude makes the budgeting process less painful.
Next week we’ll examine choosing the marketing avenues that best fit your audience and measuring results.
ASJ Partners’ comprehensive marketing solutions for the staffing industry include a six-step process that begins with a consultative assessment. We strive to understand how our expertise can be put to work for each of our clients within the framework of their marketing budget. Contact us today for individualized attention to your company’s marketing strategies.
