Creating a Digital Marketing Budget
Creating a marketing budget is one of the most important components of the digital marketing plan you intend to use. A good budget will give an insight into the costs of the goals you intend to achieve within a certain period. With that said, mentioned below are some basic steps to create a viable marketing budget.
Understand your sales funnel
Having a thorough understanding of your sales funnel is important if you intend to create an effective marketing budget. If you do not have any sales data yet just make you best, conservative, guess on your performance and continually inspect your assumptions until you have some good ‘actual’ results-driven data.
Remember to use your marketing automation software and/or CRM to gather your information to make the process even simpler. This information might include;
- The number of visitors your website has per month
- Number of leads generated per month
- Leads to Sales Qualified Leads (SQL)
- The total cost to generate SQLs
- Number of leads converted into opportunities
- Number of new deals
Consider your business goals when setting up the marketing budget
- Your quarterly business objectives
- Your annual business objectives
As a rule of thumb, if you are a small business whose revenue doesn’t exceed $5 million, you may expect to allocate about 10% of the revenues as marketing expenses.
This should be split as brand development (for websites, blogs, social media) and for events. Also, with each event, you need to give your customers and prospects the opportunity to give you feedback on your features and service direction.
Try to have each budgeted line item associated with a distinct business goal.
Always consider digital marketing as an investment
Many entrepreneurs tend to consider the marketing department to be a very expensive piece of overhead. You may be wise to think otherwise; what you spend on marketing is an investment. Always be looking for future opportunities that are opened by the marketing department.
Marketing is your umbilical cord to your prospects and customers. Make sure the information flows both ways.
Know the appropriate stage of your business
Consider if your business is in growth mode or planning mode.
If you are in growth mode, you will have to generate revenue as soon as possible. In this case, you will have to invest in marketing strategies that bring business quicker. For instance, consider where you upgrade your website to make it the hub of your online revenue generation. Although such an upgrade can cost you some significant amount of money, the rewards may be absolutely worth it.
If in planning mode, you should focus on more on steady growth and dripping Branding messages to the market instead of quick revenue generation methods. This is when you should invest in a long-term digital marketing plan. Publishing great content, link building, etc. to name a couple of concepts that may be worth investing in.
Marketing automation tools
There are hundreds of marketing automation and facilitation tools that you can buy these days to help you create, execute and manage marketing campaigns. Do not worry too much about choosing the perfect tool. The idea here is to find a toolset that is easy to use and that you think will enable you to accomplish your goals.
Future and current trends should be taken into consideration
As an entrepreneur, you must be able to adapt and apply various technologies so you can keep up with the industry standards. For instance, if you are using email, you should make use of the features like email tracking, email scheduling, contact insights, etc.
In general, a marketing budget should comprise of both traditional and innovative approaches. Keep an eye on the audience you address to and determine the type of communication they prefer most. After all, investing in marketing is a long-term process that does not end even after achieving a goal. So, it is always better to pump in more money to the marketing department as you grow big.
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