Struggling to Determine Your Marketing Budget?
In the b-to-b space, ?task? budgeting is often the best method.
One of the most often-asked questions of b-to-b marketers, How do I determine or set my marketing-advertising budget? Let’s look at some options?
The most common business-to-business marketing budget approaches are:
1)? A percentage of expected sales revenue
2)? A percentage of last year’s budget (up or down)
3)? A number given to marketing by top management
4)? The task method
We feel that the best way to arrive at your budget is the last one above, the ?task? method.
Here’s how this budgeting approach works in b-to-b space, and why it makes sense:
- You have certain objectives to meet.
- You have strategies defined to support those objectives.
- You’ve identified the best methods (your tactics, or tasks) to support your strategies.
- Those tasks are defined in your b-to-b marketing plan (under ?tactics?) and each has a cost. The total cost of those tactics is your advertising-marketing budget.
So now you say, Well, what if those tasks cost too much? What if we simply can’t afford to spend that much on our ad-marketing plan?
Here are a few perspectives on that, and why the task budgeting approach is still, we feel, the best and the most flexible method of b2b marketing budgeting:
First, if a budget is too rich for the corner office, tactics can be trimmed while retaining their purpose: either trimmed down in scope, or maybe there’s a different tactic available to achieve the same goal at a lower cost (example: online ads instead of trade magazines). Or maybe the frequency of a tactic is trimmed. The key is, your tasks must still support the strategies that you defined. So, trim down the tactics maybe, but keep your focus.
Second, your marketing staff needs to be realistic in terms of deciding on the tactics; both in terms of the scope and the cost of each tactic. Therefore, marketing needs to educate themselves (perhaps with the help of a good advertising-marketing agency) on what tools and methods from sales tools to online presence are available out there to support the sales-marketing effort. Education needs to be ongoing, as tactics especially online ones are changing constantly. This way, your marketing budgeting is viewed as it should be as a process, not a one-time exercise.
Third, a sound marketing plan is a sales and marketing plan, so some line items in the task list can (should) come out of the sales department?s budget (example: a new CRM solution or a sales training program.)? We stress once again the importance of sales and marketing working together on the marketing plan, and for top management to approve sales-cost budgets that allow for investments that support the sales effort.
Finally, be sure that you take marketing budgeting seriously. You spend time to budget for other things, plan for other things, research new equipment or software or processes for your plant or office so you should devote the same amount of effort and focus when it comes to your marketing budgeting.