There comes a time for all emerging and thriving businesses to step up marketing and get moving on creating a marketing budget for the first time. In this article, I discuss some of the basic steps to consider when creating a marketing budget.
Creating a marketing budget is a necessary step to determine the right marketing strategies that will help you ramp up your revenue.
Jenn Mancusi, CEO, Growgetter
Topics discussed include:
- When should you be creating a marketing budget?
- How do I know how much budget to allocate to marketing
- The different pieces of your first marketing budget
At what stage is a dedicated marketing budget necessary?
A dedicated marketing budget becomes necessary when a business is ready to invest in promoting its products or services on a larger scale. Here are a few stages where a dedicated marketing budget is typically required:
Launching a new product or service
When introducing a new offering, allocating a marketing budget is crucial to create awareness, generate leads, and drive sales.
Scaling the business
As a business grows, a marketing budget is necessary to reach a wider audience, expand market share, and increase brand visibility. Strategies that don’t include growth marketing tactics will get you so far, but at some point, it’s time to step in with proven marketing strategies. From a financial perspective, there are a few ways to think of it:
- Revenues are substantial, but how can you ramp them up even more? That’s where a strategic marketing strategy can come in.
- An investment has just come in, and the company expects strong growth. A growth marketing strategy can help here.
- You are one of the market leaders and need to cement success in the future against emerging brands. That could include long-term and emerging strategies to stay relevant – even in the future.
Expanding into new markets
When entering new markets or targeting different customer segments, a dedicated marketing budget is needed to adapt marketing strategies, segment campaigns, and penetrate these markets effectively.
If competitors are investing heavily in marketing and are gaining market share, allocating a dedicated budget becomes crucial to stay competitive and defend or expand the current market position.
Rebranding or brand repositioning
When undergoing a rebranding or brand repositioning initiative, a dedicated marketing budget is necessary to communicate the changes, engage customers, and establish the new brand identity.
Achieving specific marketing objectives
If a business has specific marketing objectives like increasing website traffic, generating leads, or improving conversions, a dedicated budget allows for effective planning and execution of targeted campaigns.
Remember, the size of the marketing budget will depend on various factors, such as business size, industry, goals, and desired outcomes. It’s crucial to analyze the potential return on investment (ROI) and allocate resources accordingly.
How do I know how much budget to allocate to marketing
“Your budget should be part of your planning process,” said marketing expert Andi Robinson. “How much money you have to spend will determine what marketing activities you are able to complete successfully.”
We recommend the following: If you are an early-stage startup looking to achieve rapid growth, you may spend anywhere from 10-20% of your revenue on marketing. If you are a more established business but still in growth mode, or if you’re behind in investing properly in your marketing strategy, 7-10% of your revenue is a good place to start Once you’re more established, you should expect to spend 5% of your revenue on marketing on an ongoing basis
The different pieces of your marketing budget
A marketing budget provides a framework for planning and strategizing marketing activities. It helps businesses determine how much money should be allocated to different marketing channels, campaigns, and initiatives basedThe purpose of a marketing budget is to allocate financial resources specifically for marketing activities to achieve business goals and objectives. The purpose of a marketing budget is to allocate financial resources and set aside funds specifically for marketing activities and initiatives. Let’s discuss what those areas should be:
Somebody has to do the work. That might include:
- Head of Marketing
- Marketing ops
- Content creation
- Social media
- Email marketing
And while you don’t need to hire all these roles today, it’s good to remember that somebody will need to do the work to drive success with marketing. This could also include starting with a fractional chief marketing officer, an agency, a mix of those options, and an in-house team.
In-person events work! The human connection and uninterrupted face-to-face conversation can lead to business results – especially when you follow a proven conference lead generation strategy. Conference budget line items can range from:
- Attendee fee
- Travel cost
- Dinners with potential clients
- Speaking fees
- Booth design and setup
There are several ways to make conferences a lead-generation machine for your business. Those strategies cost money and need to be included in your marketing budget.
Software is a must to make marketing a success nowadays. It’s important to start with a CRM like HubSpot that can help track attribution for the high-impact activities of marketing, including:
- Email marketing
- Landing page creation
- Lead magnets
- Website content and SEO
- Social media integration
And keep in mind that it’s helpful to have an internal instant messenger communication tool like Teams or Slack and use a project management tool to track what projects are where in the process.
Swag and Branding
A brand needs to display and carry a certain level of consistent branding throughout all campaigns, all channels, and anywhere the brand shows up. Branding includes:
- The look and feel of the brand, including on the website and at conferences
- What kind of tone does the brand use? What are some of the unique phrases and storylines your brand can use to get its messages across? For example, at growth marketing firm Growgetter, we use the phrase “ramp up your revenue” to illustrate through words the goal of any project.
Strategic advertising has a role in many marketing budgets and needs to be accounted for. What campaigns should be considered depends on a company’s specific goals, market awareness, and maturity.
Public relations can include media appearances, podcast guesting, quotes in articles, and more. Some of these opportunities are available for payment as well through paid appearances. Those might be worth it – just like earned opportunities are. An earned media opportunity is a media mention you didn’t have to pay for.
The more your brand is out there, the more organically these opportunities can happen as well. But it still takes some planning, outreach, and content creation to make public relations initiatives work.
Starting on the right foot
When creating the first marketing budget for a company, it is important to include essential elements that will help establish a strong foundation for marketing efforts. Here are some must-haves to consider. Of course, it’s sometimes not possible to start with all recommended items, and it can make sense to reach out to a fractional CMO like Jenn Mancusi to prioritize based on your actual budget.
A lot goes into setting up the proper marketing budget for success and future business success. These steps are a starting point to get your marketing going to scale business results and ramp up your revenue with strategic marketing and to drive the right ROI.