Do you have a marketing budget and is it currently working for you?
Are you finding it hard to project what you’ll need in the year ahead, or wondering what should sit within your marketing budget? We offer practical steps to forecast your best marketing budget yet.
A new financial year will soon be upon us and many companies, especially those without marketing departments, still fail to budget for marketing.
Too often, business owners regard marketing as an optional cost centre – especially when economic times are tough! However, it is important to realise that marketing is an investment, and not a cost to your business.
“Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” – Peter Drucker
Digital marketing makes it easier for B2B companies to be found, remembered, and make an impression. This increases competition but also opportunity – now is the time to ensure your investment is working for you!
Step 1: Identify what should fall under your marketing budget
Let’s go back to basics, don’t forget the marketing P’s. Many companies now treat marketing solely as communications. The activities listed below make up your marketing mix and should be considered when planning your marketing budget.
- Product – what do you sell? Is it services, consulting, or physical goods? A key part of your marketing mix is product improvement.
- Price – how much do you charge? And how is it impacting the way customers see your brand? Improve your competitive position by researching and reviewing your pricing strategy.
- Place – where do you promote your product or service? Does your company attend industry seminars and events? Does the brand have a physical and digital presence?
- Promotion – what strategies do you use to help customers find out about you? Do you invest in business development, a referral strategy, or content and digital marketing?
- People – Who are you targeting and directly and indirectly engaging with? What challenges are you solving for them? Are they high value?
- Process – How will you deliver the product to them? Consider your customer journey and experience. What marketing tools and platforms do you currently use?
- Physical evidence – How are your products and services packaged? Consider your brand identity. Is it consistent and well presented across all platforms? Do you look professional and capable?
Step 2: Analyse your marketing budget and activities from the last financial year
Now that you have identified what should fall within your marketing budget, it’s time to have a good hard look at what you invested in across your business over the last 12 months. Analysing your data, feedback, and results will help you to establish your marketing return on investment (ROI). It is a great way to determine if you should continue investing in existing marketing activities, leave them behind or try something else. We have identified some key questions to think about below:
- Is it a functional requirement for your business to market itself effectively? E.g., Branded uniform, software, signage.
- How successful was each investment in engaging your audience? E.g., New enquiries, email open rates, social likes, comments.
- How successful was each investment in driving new customers to your business? E.g. quotes sent, sales, referrals.
- How successful was each investment in creating a positive customer experience that will likely encourage them to refer others? E.g. Reviews, feedback, customer satisfaction surveys.
- How successful was each investment in providing brand awareness and exposure? E.g. Channel traffic, new subscribers.
Step 3: Reset and establish a new overall marketing budget for FY23/24
Hopefully by now you’ve got an idea of what’s been working and what hasn’t. Maybe you’ve also got some new ideas to add into the mix. That’s great!
Now that you have a thorough understanding of your previous marketing budget and a breakdown of budget categories, it’s time to forecast for the next financial year.
- Consider the marketing P’s.
- Set a ballpark budget for overall marketing spend e.g. % of total business revenue – consider the 5% revenue rule.
- Identify and analyse any marketing opportunities, campaigns or ideas to determine if they support your wider business objectives, forecast costs and prioritise.
- Collaborate with your stakeholders to ensure their requirements are captured.
- Be realistic of how much you have and what you can achieve.
- Ensure reporting and monitoring measures are in place to determine ROI.
Step 4: Get help – implement or outsource?
There’s no singular answer to the age-old question: in-house or outsourced? Other than – it depends! But setting a marketing budget will ensure you most effectively delegate tasks and resources. And will ensure you can answer this question:
Who is responsible for your marketing activities, and are they the most effective resource?
We have seen sales co-ordinators dabble with “fun” projects such as creating flyers or branded content for social media. This may take days to achieve a rough version of something an agency can deliver with professional polish in a matter of hours. Budgeting for professional help to execute projects keeps in-house resources focused on their job at hand.
Remember, marketing is an investment that should support your overall business objectives, and with careful planning and evaluation, you can make the most of your marketing budget.
Focused Marketing would love to support your marketing planning and budgeting for the next financial year. Book us in for a free Coffee Consult to start a conversation. Our structure at Focused Marketing is designed to deliver the benefits of a full-service marketing agency for less than you would pay for an in-house marketing manager.