How Should I Calculate My Marketing Budget?
So, you’re ready to level up your brand, but there’s that one question hanging over your head: “How the heck do I figure out my marketing budget?” Don’t worry—we’ve got your back. Let’s cut through the noise and make this as simple as your morning coffee.
Why Your Marketing Budget Matters
First off, let’s get real about why this is crucial. Your marketing budget is more than just numbers on a spreadsheet. It’s your game plan, your blueprint for success. Without it, you’re basically trying to navigate a maze blindfolded. So, let’s get that blindfold off and those numbers right.
Step 1: Know Your Goals
Before we even talk about dollars, let’s talk about goals. What are you aiming to achieve? More leads? Brand awareness? Customer retention? Your goals will shape your budget. For example, if you’re looking to boost brand awareness, you might need a bigger chunk of your budget for advertising and social media campaigns. But hold up—don’t skip crucial steps by diving straight into lead generation without solid brand awareness. Strong chances are, it won’t work. Customer acquisition funnels aren’t just fun buzzwords; they’re based on real user behaviours. Failed campaigns won’t just fall flat—they’ll end up costing you more. Trust us, taking the time to build a strong foundation pays off big time.
Step 2: Industry Benchmarks
Now that you know what you want, let’s see what others in your industry are doing. Generally, companies spend between 5-12% of their revenue on marketing. But don’t just blindly follow the herd. Use this as a guideline and adjust based on your unique goals and circumstances.
Pro Tip: Check out the latest CMO Survey for the freshest insights on industry marketing spend, or take a quick glance at the SEMrush chart below.
Step 3: Break It Down
Here’s where it gets fun. If you’ve already nailed down your strategic plan, it’s time to break your budget into categories. Think of it like planning a party. You’ve got your venue (website), entertainment (content), and invitations (ads). Some key categories might include:
- Advertising: Paid social, Google Ads, display ads.
- Content Marketing: Blogs, videos, infographics.
- SEO: Both on-page and off-page.
- Social Media: Organic and paid efforts.
- Email Marketing: Newsletters, drip campaigns.
- Innovation/AI: Cutting-edge tools and technologies to keep you ahead of the curve. Not sure where you stand on AI. Take our test!
The 70-20-10 Rule: A Killer Formula for Budget Allocation
Feeling a bit lost on how to slice that marketing budget pie? Don’t worry, we’ve got a recipe for you: the 70-20-10 rule. It’s a solid benchmark to kick things off:
- 70% of your budget goes to tried-and-true strategies you know work.
- 20% of your budget is for new strategies that could help you grow.
- 10% of your budget is for experimental, out-of-the-box ideas.
Marketing Cost Example
Let’s break it down with some real numbers. Say your marketing budget is $50,000. Here’s how you might spread the love:
- $35,000 towards a CRM or other software you swear by, successful paid search campaigns, and social media marketing.
- $10,000 for marketing a new product, feature, or service you’re testing.
- $5,000 for testing sponsored content or any wild, new ideas you’re curious about.
So, there you have it! A straightforward, smart way to make sure your budget is working as hard as you are.
Step 4: ROI – The Magic Three Letters
ROI (Return on Investment) isn’t just for the finance team. You need to know what’s working and what’s not. Calculating ROI is pretty straightforward: take the revenue generated from your marketing efforts, subtract the cost of those efforts (that’s your Net Return), and then divide by the cost. Voila! You’ve got your ROI.
But don’t stop there. Keep an eye on other key metrics too, like Cost Per Acquisition (CPA), which tells you how much you’re spending to get a new customer. Or Customer Lifetime Value (CLV), which helps you understand the long-term value of each customer. Track these numbers and be ready to pivot. If something’s not bringing in the bacon, don’t be afraid to cut it loose.
Case Studies: Real-World Success Stories
Listen up, folks! Whether you’re teaming up with in-house managers, consultants, agencies, or freelancers, the key to smashing success goes beyond just picking the right team. It’s about open conversations and trust. Sure, there’s no magic formula for guaranteed success, but discussing challenges, fears, and hopes with your marketing crew can seriously boost your chances of hitting it big. Check out some of our recent success stories and see for yourself how smart budget strategies make all the difference.
#1 Real Talk: How A Kelowna Boat Rental Company Made Waves with Smart Budget Shifts
One of Csek Creative’s Kelowna-based clients, a boat rental and charter company, wanted to make a splash in the competitive tourism scene. They took our advice to heart, shifting 20% of their budget from one platform to another and investing in eye-catching video ads.
The results? In just one month, they saw impressions jump by 28%, clicks surge by 60%, and lead generation soar by a jaw-dropping 137%. All of this, despite a challenging tourism landscape.
#2 Real Talk: How One Kelowna Retailer Stepped Up Their Game
Another of Csek Creative’s local clients, a retail store known for its handcrafted footwear, had a clear goal: to boost online sales and traffic. So, we got to work. We funnelled 20% of their marketing budget into killer email campaigns and the other 80% into crafting ads and launching an e-commerce social ad campaign. The result? Over six months, their website traffic shot up by 197%, and their online sales skyrocketed by about 600%. With detailed analytics guiding their every move, we were able to tweak their strategy on the fly, ensuring consistent, steady growth.
Step 5: Flexibility is Key
Your marketing budget isn’t set in stone. It should be as dynamic as your business. Quarterly reviews can help you stay on track and make necessary adjustments. Think of your budget as a living document, always evolving. And remember, your marketing agency isn’t just a service provider—they’re your partner in this journey. You share the same goal: smashing those business targets. Keep the communication lines open, collaborate closely, and watch the magic happen.
Pro Tip: Don’t Forget the Tools
Invest in tools that make your life easier. Whether it’s a snazzy CRM, a robust email marketing platform, AI-driven analytics software, or even AI-powered content creation tools, the right tech can streamline your efforts and maximize your budget. Remember, marketing can generate leads, but your operations will convert and retain them. Your business is a well-oiled machine, and these tools, especially with AI in the mix, are the grease that keeps it running smoothly. Don’t skimp on them—your future self will thank you.
Wrapping It Up
So there you have it—your guide to calculating a killer marketing budget. Remember, it’s all about aligning your goals with spending, tracking your ROI, and staying flexible. And hey, if you need a hand or just want to chat about your strategy, you know where to find us!
