How do you determine the right marketing budget? This is a question that all marketers ask themselves one day. The Afghanistan Email Address too. Do you have a knot in your head and don’t know how to calculate your marketing budget? Are you also stressed about defending him? We give you all the keys! I’ll be blunt: I found myself in this situation early in my career. When my managing director at the time came to me to ask me to make him a marketing budget proposal, I immediately wondered how I was going to do it. I did like you today: I went to Google, I typed “How to calculate my marketing budget” and I applied the method that I found the most effective. Theoretically, she was great.
In practice, it was crap. If we have so much trouble defining a marketing budget. It is because we are not taking the problem in the right direction. We try to determine an effective marketing budget. Without knowing where we want to go. And that’s impossible unless you’re lucky. To calculate your marketing budget. You must start with your goals! If I continue my intro anecdote. I managed to calculate a marketing budget that seemed relevant to me. With this method found on Google. I went to see my GM by presenting the budget. And the strategy that I put in front. From memory, there were 80,000 euros for the year. The amount shocked him. He told me he was going to study the 20 pages of my document. I never got the marketing budget. Why do you think? Why did I not manage to convince my management?
The method to calculate your marketing budget
Because I wasn’t talking about return on investment. To define an effective marketing budget in B2B, there is nothing complicated in fact: you just have to start from your objectives and work your way up. Define your revenue goal. It is the starting point of your reflection to define your marketing budget effectively. Without having a precise idea of the turnover you want to generate with your marketing strategy, you will not only be able to define your budget but you will especially not be able to generate a return on investment with your marketing strategy. Of course, your revenue target must be achievable and time-bound. Calculate the number of new clients you need to sign. Now that you have determined the revenue you are targeting with your marketing strategy, you are in a position to define the number of clients you need to sign to reach it.
For that, nothing could be simpler: you divide your turnover objectified by your average basket. Calculate the number of leads you need to generate It is from now that your thinking about calculating your marketing budget will take on its full meaning. If we recap, you know at this stage how much turnover and how many customers you need to bring in your marketing strategy. You begin to have a precise idea of the means that you will have to put in place to achieve these goals. To achieve your goals, you need to have a marketing strategy in place that will allow you to generate the necessary leads for salespeople. To determine the number of leads you need to generate for salespeople, all you have to do is take their conversion rate: how many prospects do you need to meet with salespeople to sign a new customer?
The 4 steps to defend your marketing budget
By getting this response, you can set the number of leads you need to generate. Determine the number of visitors you need to attract To generate leads on the internet, you need to attract qualified visitors to your website. Ok but how much? The same mechanism as for the previous point: to define the number of visitors that your marketing strategy must allow you to attract to your website to achieve your objective, you just need to start from your visitor/lead conversion rate. How many contacts do you generate each month from your website? How many visitors do you have? If you do the ratio, you get your conversion rate. By applying it to the number of leads you need to generate with your marketing strategy, you get the number of visitors you need to get to meet your goals. Estimate your marketing budget.
Now you have all the keys in hand to define your marketing budget. You know that your marketing budget must allow you to generate a certain number of visitors, leads, customers, and therefore turnover. You, therefore, have a more or less precise idea of the actions to be taken to achieve these objectives. A relevant marketing budget is a marketing budget that is between 15 and 25% of the targeted turnover. Depending on the actions to be taken to achieve your goals, you are able to adjust this range. Better, you have all the elements to convince your general management! You can define a marketing budget that will allow you to achieve a specific turnover and therefore presents the expected return on investment to your management. You have made up your mind.