Successful marketing isn’t just about ad campaigns, content creation, lead generation, and attending events. Successful marketing is also about strategy, foresight, and goal setting. But most importantly, to be a successful marketer, you must know how to adhere to a budget, so you can distribute funds effectively to maximize your marketing effort.
As head of marketing, renewing your marketing budget regularly will help you reach your marketing goals and ensure you consistently nail your targets.
Here, we’ll explore what you should consider before creating your marketing budget, as well as show you how to create a winning marketing budget for 2023 in five steps.
Aligning to what matters
Before you create your marketing budget, you must align with the right people in your company. A good head of marketing should work closely with the sales and finance departments. Salespeople will give you insight into the sales process, and the finance department will allow you to dive into the company’s financial status.
Here are some things you must know:
Current Sales Cycle
Your salespeople have precious info on how long a deal takes from open to close. Having this data will determine how you use your money to drive sales. For example, you may find that your sales cycle is too long and may want to attribute more money for closing deals faster.
Average Deal Size
Learn everything there is to know about your deals. Knowing your average deal size and how it has increased or decreased over time will provide invaluable insight into how much money should be budgeted to close a deal.
Company Revenue Targets
This one is a mix between your sales and finance departments. You must know how much revenue your company expects to make over time. It will make your life easier when you sit down to create your marketing budget and help you determine how much money you should allocate per region.
Helps you polish your marketing plan and strategy
Your marketing plan and strategy must include your marketing budget. It’s the only way to set attainable goals and milestones. That sense of direction is invaluable for any company.
Efficiency
You should not overlook your company’s sales efficiency. There are plenty of efficiency metrics you can use – overall operations effectiveness (OOE), total effective equipment performance (TEEP), production cost, and production volume, just to name a few. Still, one of the most effective metrics is lifetime values to customer acquisition (LTV:CAC). It shows you how much money you’re bringing in from a customer compared to how much it costs you to get one. A good ratio to aim for is 3:1.
Once you’ve aligned yourself with the right people, you’re ready to create a successful marketing budget that will bring clarity to your marketing strategy.
5 steps to strengthen your marketing budget
1. Calculate your funnel
Whether you prefer a traditional (old school) or ABM (new school) funnel type, understanding your funnel is the first step in creating your budget. Knowing your sales funnel inside out allows you to create a predictable model and set achievable benchmarks.
While no two funnels are alike, there are vital elements you must extract from them:
- MQL (marketing qualified leads)
- SQL (sales qualified leads)
- Meeting attended
- Opportunities (pipeline value)
- Closed deals (revenue)
Having the data above will let you find problems within your company and allow you to ask the right questions to make your funnel more efficient. Further, it will help you create your marketing budget more precisely.
2. Breakdown per region
You want to understand your salespeople’s numbers per region. If your company only has one region, your breakdown can include sales teams or individual salespeople. This breakdown will further break your sales numbers, giving you a closer look into your company’s overall sales performance. Once you know how much each region brings in, you know where to pump your money with direction and purpose.
3. Regional marketing collaboration
The next step is about cross-functional communication between marketing teams or marketing heads, depending on the structure of your company. You must know what each marketing team plans to spend in the coming months. For example, you can ask your marketing teams how many events they will attend or how many marketing campaigns they plan to create. This will allow you to input the correct numbers and get a general idea about how much money needs to be budgeted per region or sales team.
4. Plug in lead numbers per activity
Knowing how much each lead costs is essential. Examine every marketing channel to ensure you have an accurate figure for each channel your marketing teams are using to generate MQLs and SQLs.
It can be helpful to separate it into three activity types:
Offline
- Direct mail
- Trade shows
- Own events
Online (Paid)
- Google Ads
- Facebook Ads
- PR
Online (Organic)
- Written content
- Videos
- Webinars
- Masterclasses
5. Create your budget and automate your forecasting
Once you’ve worked through the steps above, you want to input your data into something that allows you to track and manage your budget in real time. You need the help of something that can automate your forecasts to determine whether you’re overspending or underspending.
You want a flexible, intuitive platform that can indicate if you’re hitting your anticipated volume of leads, MQLs, SQLs, and meetings. You need the right tool for the job – you need MARMIND. This all-powerful MRM platform is designed to help you plan and manage your marketing budget from start to finish. Further, it will help you pull all your marketing data into one place, removing all the pain from building your marketing budget.
Last thoughts
A marketing budget is forever a work in progress. It must be tweaked and refined no matter how well it has worked in the past. As head of marketing, you must ensure your marketing budget covers every aspect of your company’s marketing spending.
It’s, therefore, essential to revisit your budget often and analyze how it can be improved.
Author
Peter Fechter
Peter is Digital Marketing Manager at MARMIND and is mainly responsible for website and lead management. When he's not busy creating content, he is developing new strategic approaches for campaign planning.