With today’s marketing tech tools, marketing projects can be a lot of fun — and you can see fast results.
But before you decide which marketing projects you want to take on, you need to consider some basics. First, collect essential information about your business:
Where are you today and where do you want to be in a year?
What are your current and project sales revenue?
What are your customer acquisition costs?
What are your current customer (and prospect) demographics?
What markets are you targeting?
What does the customer journey look like, and how long does it take (on average)?
How many competitors are in your markets and what are they doing right?
Where can you differentiate from your competitors?
Which marketing channels have been working for you, which haven’t?
How many people do you have on your marketing team, and is that number going to grow over the next year?
The next step is to learn about the Xight Marketing Budget Tool.
This benchmark tool is a conversation starter. It's a starting point for you and your team.
There’s no “one-size-fits-all” way of calculating what your budget should be (you and your business are unique!). There are several common ways of looking at budgets:
Percentage of sales revenue. Budget 1-15%, budget 6-12%, budget 15-20% to really grow. There are as many opinions as there are blog postings on the subject.
Business focus and percentage of sales revenue. Are you a business-to-business (B2B) or business-to-consumer (B2C) company? Do you sell products or services? B2B should budget 8.6%, B2C should budget 9.1%, still a lot of options.
Business lifecycle. Are you a seed company, a startup, an established growing company, or on the way out? New companies should budget 12-20%, established companies 6-12%. Again, many different perspectives.
Of course, there's always to most terrifying of options. How little can I put into this marketing stuff, are there any free options? (We’ve been there, don’t worry you’re not alone!)
At Xight Solutions, we like to look at benchmark data collected from surveys. Of course, even this is an imperfect solution. Survey respondents may not represent you, or your business.
No matter your approach, it’s only a starting point. You need to discuss your goals with your executive team. Resources are scarce at all companies. There’s always competition for the biggest budgets. Loop in the people who are doing your marketing, find out what their ideas are. And remember to track results so that next year you’ll have data to inform your budget decisions.
Check out our Xight Marketing Budget Tool. Use it to get your team talking about the best budget for your business.