Somebody had to bring up the Fiscal Cliff and its impact on marketing in 2013. Might as well be me. Actually, the Fiscal Cliff isn't really a huge problem on paper. We Americans spend too much and save too little. All we have to do is agree how to balance the budget. Of course, the "agree" part is the tough nut. And so it is with marketing. Assuming the economy really is on its way to recovery, how do C-Suiters budget for the rapidly approaching New Year and what slice of the pie do they give to marketing?
What's a Reasonable Marketing Budget?
I'm going to take a fiscally conservative approach, one based on lean digital marketing with the goal of building a sustainable growth of 10 percent per month in MQL and SQL leads over the next 12 months. What would it take to accomplish that goal? We do this all the time and monitor results, so here's what we're suggesting as a minimum marketing output per month. All costs are approximate and include labor:
- Project management (~$3-5K)
- 1 new whitepaper or e-book per month + CTA + landing page (~$2-5K)
- 12-15 blog posts per month (~$1K)
- 1 email campaign for the new e-book (~$1K)
- 2 email campaigns for other content (~$2K)
- 2 press releases per month ($800)
- PPC/social media ads targeting new content (~$3K)
- 1 new lead nurturing campaign for the new e-book (~$2K)
- 1 new lead nurturing campaign for a new segmented smart list (~$2K)
- Lead intelligence and management (~2K)
- Analytics and reporting ($1.2K)
Total Marketing Budget: $20-25K per month
That's about $250-300K per year in marketing spend. But, we only have a fraction of that budgeted. OK, I hear you. First, don't forget that this budget includes labor. In reality, you would need the following people on staff to accomplish these goals:
- VP Marketing
- Project/Account Manager
- Inbound Marketing Consultant
- Blog/ebook Copywriter
- Graphic/Web Designer
- Web Developer
Yes, total compensation for this team would be well in excess of $300K per year, not to mention costs for software, PPC/social media ads, press releases and any other distribution costs. You could make some cuts here and there, but bearing in mind content marketing is what drives inbound marketing success, there's not a whole lot of fat to trim. OK, so we've covered the spending side of the "cliff." What about the revenue side?
How Will We Make Money via Marketing?
The key thing here is understanding the relationship between sales and marketing. Ideally, we want these two departments (or people) aligned with respect to goals, messaging, process and metrics. A properly tuned inbound marketing machine is 100 percent focused on attracting qualified sales prospects (at least in principle), converting them to marketing qualified leads and nurturing them into sales qualified leads. The handoff between marketing and sales, between marketing automation and CRM, should be seamless. Our entire strategy should be to put people, technology and processes in place to accomplish that mission. If successful, we should be able to drive enough new sales each month to be profitable.
The good news? We can measure how well we are doing at every step and for each campaign marketers devise. Our monthly reporting score cards should show how many new leads we attract into our sales funnel and how many are moved to the next stage in the sales cycle (prospect, lead, MQL, SQL, Opportunity, Customer). We need to also break that data out by individual lead generation and lead nurturing campaign to assess the effectiveness of our content and strategy for each campaign.
The Bottom Line
Just like the Fiscal Cliff, the Inbound Marketing Cliff is more about perception than reality. People perceive the Fiscal Cliff as a huge problem with very little chance of a successful outcome. Really, it's just two guys making a deal. CFOs look at their marketing budgets and ask "why?" Have we turned into a welfare program for wayward artists and MBAs? Where is the risk abatement in that? The whole point of inbound marketing is that marketing has become a measurable, even predictable, process, thanks to the Internet and the world's unquenched thirst for content. If $200-300K seems like a big investment with very little chance of a positive ROI, think again. SMBs, mid-market companies and enterprises alike are all seeing profits from their new sales and marketing strategies. It can be done. You just have to be willing to take the leap.
Photo credit: snowlepard
With over 30 years of business and marketing experience, John loves to blog about ideas and trends that challenge inbound marketers and sales and marketing executives. John has a unique way of blending truth with sarcasm and passion with wit. You can connect with John via Twitter, LinkedIn or Google Plus.