Don’t look now, but you’re about to start the first quarter of a new year. A new year means new customers, new sales goals, and new opportunities to grow your business. It’s an exciting way to start the year, but it won’t last long if your marketing budget isn’t right from the start.
Many companies plan their marketing budget based on the previous year and how much they’re willing to spend on marketing. This is a great way to hold yourself back from achieving your sales goals, or to spend too much on wasted efforts.
Want the most bang for your buck? Here are four critical keys to planning and implementing a marketing budget that gets results.
1) Start With A Marketing Strategy
Before you calculate your marketing budget, align your marketing goals with your company’s strategic business goals and vision for growth. If you plan to grow by 20%, but only want to invest enough in marketing to get new business cards for everyone in your company, you’re probably going to be disappointed with your return on investment!
It’s important to develop a written marketing strategy that your executive team, sales team, and marketing team are onboard with. You need everyone to be driving their activities in the same direction.
Pro tip: Learn more about what goes into a digital marketing strategy in our Ultimate Guide to Digital Marketing for Manufacturers.
2) Set Your Marketing Budget
Once you’ve aligned your business goals with your marketing goals, you’ll need to identify your marketing budget so you can develop a detailed marketing plan that supports your strategy. Basically, you’ll choose from three options:
Lean Plan: – 2% of your top-line revenue. In essence, you’re committing to engaging and retaining current customers with simple tools and strategies. This is ideal for companies that are looking to maintain their market position and don’t have ambitious growth goals.
Target Plan: 3 – 4% of your top-line revenue. The goal here is to attract new prospects and retain current customers with advanced tools and strategies. This is ideal for companies that are looking to increase their market share and have moderate growth goals (10 – 15% annual growth).
Stretch Plan: 5% or more of your top-line revenue. Your target is to accelerate your results by applying more resources that are focused on driving leads, conversion, and sales. To do this, you’ll use complex marketing strategies and cutting-edge tools. This option is ideal for companies who have ambitious plans to grow and increase their market share (20% or more annual growth).
3) Allocate Your Marketing Budget Dollars
Armed with your goals and a budget, you can now get into the nitty-gritty of developing a tactical plan to transform your marketing dreams into reality! The complexity of your plan will depend on the marketing budget you’ve identified, but you should also consider including tactical plans related to:
- SEO and paid advertising
- Social media
- Content offers, blogging, and email marketing
- Lead conversion and nurturing
- Traditional advertising
Determine how much of your marketing budget should be allocated to each aspect of your plan. The chart below is based on a recent survey by Forrester Research. It displays the percentage of B2B companies’ marketing budgets that was allocated to each area of their marketing plans. You may decide to spend more or less based on what your direct competitors are spending, your industry, and your specific goals.
4) Implement A Marketing Budget Plan
Once you’ve developed a plan that supports your business goals, you need to implement it. And to guarantee a successful implementation, you need a team of qualified marketers, designers, and technical experts. You’ve got a few options for creating such a team:
In-House Marketing Team
To execute a complex marketing plan, you need a team of people who possess skills in copywriting, coding, design, social media, paid search, and SEO. Unfortunately, there’s no single person who can effectively do all those activities.
Large corporations will often hire an in-house team, but specialists can be expensive. Benefits, training, and equipment alone could easily cost up to $500K per year. For most smaller businesses, this isn’t an option.
Freelance employees can be a good choice for individual projects. Skilled marketing freelancers can help fill in the gaps that your marketing director can’t supply, and they can be a lifesaver in a pinch.
But when you’re trying to bring a long-term, complex marketing plan to completion, you’re likely to experience a series of stops and starts on the project. Because they work on-demand for several clients at a time, they may not be as available as you need them to be. You may need to hire extra people to cover all the roles to execute your plan. In addition, there’s the coordination and communication time you’ll need to manage all the freelancers. And when a freelancer moves on, they take all the knowledge of your project with them, forcing you to start over from scratch.
Contracting a marketing agency has several benefits:
- Services of top-notch marketing experts without incurring the costs of hiring, training, and managing several in-house employees
- Accountability from a team that wants to succeed and prove the value of its marketing services
- Predictable costs because your marketing expenses are based on a monthly retainer fee
Hiring a virtual marketing team typically involves an investment of $60K – $150K per year, which is significantly less than the cost of an in-house marketing department. However, your team is off-site, which means communication can be a little slower at times and you may need to work via teleconferencing. Also, because marketing teams have several clients, you won’t have a claim on their time every minute of every business day.
The best solution might be a hybrid of a small in-house marketing team that’s dedicated to one or two key tasks, supplemented by an agency team that rounds out your marketing efforts. And the agency can usually provide training and best practices guidance to your staff, freeing you from this responsibility. Be sure that everyone is clear on their roles and responsibilities, agrees on metrics, and is committed to a shared vision for success. This can be a very effective approach to implementing a solid marketing plan!