How much should you budget for marketing in 2020? Plus FREE Budget Templates!
The Gartner CMO survey suggests that the average marketing spend should be 11% of total revenue. Commentators also suggest that the proportion of marketing budget versus revenue should be higher for newer companies or challenger brands. The problem is that companies are still trying to understand the best areas in which to invest their budgets. A lot has been written on digital spend versus more traditional marketing budget, but it is sometimes hard to compete and keep up with more well-established competition without huge marketing budgets.
Secret Source have been working in sales and marketing for over 20 years, both client and agency side. Therefore, we have worked with the good, the bad and the ugly when it comes to marketing budgeting. While we are not going to tell you how to spend your marketing budget, here are a few things below to consider that might help. Read and then download our FREE Marketing Budget Templates!
strategy is key
First, start with the strategy. What is the company trying to achieve in the way of growth? Start to work on your marketing budget allocation for the area that may need the most help. Proficient sales and marketing leaders will understand their marketing budgets and have a handle on their TOFU, BOFU, MQLs and SQLs. How many new enquiries are required and where is the audience for those enquiries? Still, many forget the main company mission filtering down to the different areas, sales marketing and operations. So start with your marketing budget plan.
TRY TO BE AGILE
Budgets need to ROI and they need to be accountable, but don’t be afraid to experiment. The most proactive sales leaders and business owners we have met keep some flexibility within their marketing budget process to allocate ventures that were not stringently planned. However, if you are going to try something new, then commit. Don’t dabble. Simply trying marketing initiatives on the fly, to then pull them because it hasn’t immediately bought back short return on investment can be short-sighted. First understand why, then maybe give it time or adjust the approach rather than dismissing it straight away. The ‘we’ve already tried that’ attitude is commonplace. Just because you tried it and it didn’t work doesn’t mean it won’t work. Instead, look at other companies in other sectors that have tried something similar and succeeded. If you want to differentiate from your competition, then your budget might have to reflect that too.
iNVEST IN YOUR INFRASTRUCTURE
A solid base on which to launch your campaigns, measure the results and reduce time spent working and reworking content or campaigns is money well spent. Examine your CRM. Are you using automation systems to help with sales, marketing or service operations? This can help with consistency in approach and the customer journey, negating the need to manually input data but also reduces the chance of missing activities. Examine your budgets. How much goes towards your core infrastructure; websites, applications, CRM, automation, reporting as examples?
ALLOCATE A BUDGET
Integration of budgets and operations can be restrictive. Business leaders often allocate marketing budgets in silos whatever that might be; online, offline, outbound, inbound, customers, new business etc. to give them their broad categories. Some great companies we work with still think of it in campaigns. So plan a campaign with an allocated budget to help both clients and prospects, business partners and influencers. Then allocate a dedicated budget, assign the skills and then track the resources and results accordingly.
Factor in people and testing
Budget spend on people versus operating budget. Be careful not to invest large amounts of budget on people expecting them to deliver straight away. Consider your salary budget and marketing spend as one total cost. Companies sometimes ignore ‘people spend’ preferring to slash capital spend. Instead consider the alternatives, utilising specialist skills externally as and when you need them is becoming increasingly common.
Don’t forget to allocate budget on research or testing of messages. Testing often gets ignored or downgraded, but it is still important to research and test. Testing can however incur cost, so make sure it is accounted for in your sales and marketing budget.
Some helpful things to consider when budgeting are:
- Start with the strategy
- Don’t be afraid to try something new, but give it a fair deal
- Invest in your sales and marketing infrastructure
- When budgeting, invest some time in reviewing the past results
- Invest in the competition research
- Review how the market buys and if you can be disruptive!
- Look at your total costs, salary and budget
- Try to think joined up with your budget and not in silos
- Include capacity to test and research.
If you are putting together your 2020 marketing budget and don’t know where to start, then then get in contact with Secret Source for some support.
If you would like to download our FREE marketing budget templates, click on the button below.
About Secret Source Marketing – With 20+ years experience working in Sales & Marketing our specialists help business owners, sales and marketing leaders to get the best out of their marketing operations. Graphic Design, Campaigns, Digital Marketing, Market Research and Content Writing, Secret Source Marketing are a trusted team and the source behind the brand.