No one likes to figure out the marketing budget. Not small business owners. Not large enterprise marketing teams. So, if you're feeling a little queasy, you're in good company!
We know. It's much more fun to chase a shiny new technology and think "this one is going to make the difference."
Or to ignore changes in customer behavior and keep doing what you've always done.
But those strategies will fail you...
Marketing is changing — fast. The "Marketing Technology Landscape Supergraphic (2018)" lists 6,829 marketing technology solutions! Scott Brinker, Editor at chiefmartec.com and Co-Founder & CTO of Ion Interactive, Inc., has been tracking this landscape for six years. In 2011 he mapped 150 technology solutions. In 2018 this number has exploded to 6,829!
This increase in technology solutions is in response to our new behaviors online. We stay in touch with our friends and colleagues (or tribes) on social media. We go online to research what we want to buy and to look at online reviews. We use maps on our smartphones to find businesses close to us. We bring our phones to the store with us and look up reviews (and compare prices) while we shop.
The idea of marketing is simple: help customers pick your product or service over that of the competitor. Choosing how, what, and where to market online has become very complicated. And pretty confusing if you're not following marketing trends).
The Magic Marketing Budget Number
There's a lot of things a company can do to market their business. Have you heard family, friends, colleagues, or consultants say things like:
Use Google Adwords
Advertise on Facebook
Do (or don't) use email marketing
Start blogging and post every day
Offer webinars and courses
Live chat on social media
Start a video blog
Podcasts are what you should do
Hire an SEO consultant, so you rank on page one
Increase your conversion rates
Use pop-up ads on your website
The list of suggestions is never-ending. And you can spend a lot of money to figure out the right combination of 6,829 marketing technology solutions to use.
It feels like you're going down a rabbit hole, doesn't it?
Stop the free fall.
Start with A Number.
Your Marketing Budget Number
The easiest way to determine a marketing budget is to make it a percentage of sales revenue. (Or your best guess for sales revenue next year).
No, this is not a perfect place to start. It doesn't account for things like:
Your business lifecycle (are you a startup or established company?)
Your business focus (do you sell to businesses or consumers; do you sell a product or a service?)
Your product price and sales cycle timeline
Your risk tolerance
Your growth goals (which define your marketing goals)
And yet, you have to start somewhere…
Marketing Budget as A Percentage of Revenue
So what percentage comes to mind for you? A conservative 1-3%? An aggressive 35-40%? How does your number compare to others?
Our Marketing Budget Tool does the work for you.
The tool will show you two budget numbers based on benchmark data.
Market budget per business focus. Business focus types include: business-to-business (B2B), business-to-consumer (B2C), product or service oriented.
Market budget based on lifecycle stage. Stages include: seed & development, startup, growth/establishment, expansion/maturity, maturity/exit).
Learn about business focus definitions and lifecycle stage definitions on the Budget Tool Terminology page.
If you already have a marketing budget in mind, you can enter that number. The tools will provide a comparison of your budget to the two benchmarked budgets.
(Note: You’ll be able to view the tool in Google Docs. When you open the spreadsheet, be sure to enable macros).
Learn more about the Xight Marketing Budget Tool in the blog post, “How To Use the Xight Marketing Budget Tool.”
The Xight Marketing Budget Tool is a starting point. Discuss the tool's output with your team. Talk about your proposed marketing budget, goals, and planning.
Establishing an overall marketing budget number is the first step. Next, you need to decide where to spend that money — your marketing budget allocation.
Want to be the first to receive the Marketing Budget Allocation Tool?
Sign up today, and we’ll email you before distributing online.
The information provided within this Marketing Budget Tool is for general informational purposes only. While we try to keep the information up-to-date and correct, there are no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information, products, services, or related graphics contained in this Tool for any purpose. Any use of this information is at your own risk. The methods described within this Tool are the author’s personal thoughts. They are not intended to be a definitive set of instructions for this project. You may discover there are other methods and materials to accomplish the same result. View the sources for benchmark data used on the Budget Benchmark Sources page.