How to create a marketing budget
Whether it’s time to create your first ever marketing budget, or the first time you’ve been asked to create one, here’s some things to consider before you get cracking:
Start with the goal. Can the business give you some sort of steer of what is needed to be achieved. If you’re a founder, what are your growth goals? If you’re a marketer, what have the business said is needed? If they haven’t given you a goal, this is where you should start.
What’s in and what’s out of the budget? A fully loaded marketing budget should include everything, including the time spent on marketing - your salary, too. As this will give the business a true idea of the costs involved in marketing activity. Maybe sales enablement tools don’t need to be in your budget, and it’s a good exercise in definition of what is and isn’t technically marketing.
Work out the value of a KPI to the business So many businesses don’t know this. How much is a lead, what’s the LTV of a customer? Are they worth the same now, will new propositions change this at all? What does the economic environment dictate (or not)?
Plan 80%, keep 20% back for ad hoc things that arise. Keep some wiggle room in the plan, so you can double down on something that’s working, keep some cash aside for something that you want to try, or experiment.
Plot your numbers backwards
Once you’ve established what you need to achieve, then you can plan backwards of how many customers you need to get to this goal, how many leads you need to turn into customers, and how many eyeballs you need to turn into leads.
Think people, not impressions - how many people are you acquiring, nurturing, turning into aware audiences?
How much can the business afford to spend now, if that user/customer comes back to repeat. Looking at a CPA basis is only half the story if these targets are set based on their initial purchase - set on ROAS. If they come back and spend 4, 5, 6x their initial spend with you, what did you miss out on that could have delivered more customers, or those that might 8-10x their initial spend?
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