Setting a marketing budget can be a challenging task, especially when your company has lofty growth goals. Allocating the right amount of resources to achieve your business objectives requires a strategic approach, a deep understanding of your target audience, and the ability to measure the return on investment (ROI) of your marketing efforts accurately. Below we will outline how to set a marketing budget around business growth, providing you with actionable tips and insights to help optimize your marketing spend and drive revenue for your organization.
There are three typical budgeting approaches: activity-based budgeting, baseline budgeting, and goal-based budgeting. While each approach has its pros and cons, goal-based budgeting is the most effective for driving growth in B2B companies.
Activity-based budgeting focuses on the specific activities and tasks that need to be performed, allocating resources accordingly. Baseline budgeting, on the other hand, uses past performance as the basis for future budgeting. While these approaches may seem practical, they do not necessarily align with the overall business goals and objectives.
Goal-based budgeting, on the other hand, focuses on achieving specific business outcomes and goals. This approach aligns budgeting with business strategy and ensures that resources are allocated to achieve growth targets. By setting clear goals and budgets that align with them, B2B marketers can achieve better results and drive growth more effectively.
There are seven common mistakes that many marketers make when budgeting:
1. Not setting specific and measurable goals.
2. Failing to align the budget with the overall business strategy.
3. Ignoring market trends and competitor analysis.
4. Overlooking long-term investments in favor of short-term gains.
5. Not considering external factors, such as the economy or industry trends.
6. Relying too heavily on historical data or assumptions.
7. Failing to allocate resources effectively across channels.
To avoid these mistakes and achieve optimal results, B2B marketers should ask themselves a series of critical questions when building a goal-based budget.
1. What are the company's overall business goals and objectives?
2. What are the marketing goals and objectives that will contribute to achieving these business goals?
3. How can marketing align with the sales team to achieve these goals?
4. What are the target markets, and what are their specific needs?
5. What channels and tactics are most effective for reaching these target markets?
6. What is the total available market, and how much market share can realistically be captured?
7. What is the ROI for each marketing channel, and how can the budget be optimized for maximum ROI?
8. What external factors need to be considered when setting the budget?
9. How can the budget be adjusted to account for changes in the market or business environment?
10. How will the success of the budget be measured, and what KPIs will be used?
By thoroughly working through each of these questions, you will be better equipped to make informed budget decisions that achieve your business goals. At The Vertical Solution, we can help B2B marketers build goal-based budgets that align with business strategy and drive growth. Contact us today to learn more and start achieving your growth targets.