Ten dollars says that question sent you reeling into a minor panic attack. While the rest of the world is enjoying October—you know, frolicking through apple orchards and sipping pumpkin spice lattes—you’re spending your free time agonizing over next year’s marketing budget.
Many marketers dread creating their annual budgets. They know their CEOs, CFOs and other key decision makers will scrutinize nearly every line item as soon as they hand over their proposed numbers. Setting aside funds for inbound marketing can be particularly stressful, as the mere term “inbound marketing” is still foreign to many non-marketing folks.
You know if you’re not quick to place value on your inbound marketing budget, you won’t be granted the funds you’re requesting, and you’ll be forced to continue implementing marketing strategies and tactics you know are less efficient and more costly.
To create a better inbound marketing budget for 2015, one you can skillfully defend to senior management, follow these two easy steps.
The first step in creating a solid inbound marketing budget is to determine how much you have to spend and how much you need to spend in order to get the results you’re after. There are two real ways for doing this. The first is to use the marketing budget ratio (marketing investment divided by total revenue). This is something we’ve suggested in the past and continue to suggest today. But exactly what percentage you should budget depends on more than your revenue—it depends on your growth goals, as well.
The second approach involves determining an exact cost for the buyer journey for one customer. By this I mean you must (to the best of your ability) nail down how much you need to spend in order to find a new potential buyer, nurture him into a sales qualified lead and transform him into a customer. This is the most detailed and difficult way to determine your inbound marketing budget, as some activities (like building brand awareness) are more difficult to tie to ROI. However, according to Jon Miller, Marketo VP and co-founder, this approach will be the most likely to get full approval, as it can show exactly how the budget translates into “more leads, opportunities and wins down the funnel.”
Once you know how much you should spend on inbound marketing, the challenge is determining which tactics you should spend your money on. Four main factors contribute to how you should spend your marketing funds: budget size, changes in the inbound marketing industry, your company’s past marketing successes and the people you want to reach.
As my colleague Carrie Dagenhard said, marketing budgets are never perfect; they require constant monitoring and tweaking. This is especially true if you’re new to creating an inbound marketing budget. However, by following the above steps, you’re more likely to create an inbound marketing budget that will prove effective for your company.
Want more help creating a better inbound marketing budget for 2015? Join Timothy Kiedrowski and more inbound marketing experts at Kuno Creative Thursday, October 29, at 1 p.m. (EST) for the webinar “Creating an Inbound Marketing Budget for 2015.” Click the banner below to reserve your spot today!