The Five Big “B’s” of Budget Brainstorming

Around this time of year, I find many CEOs and marketers grappling with just how much they have to spend to achieve their business goals.

Some experts suggest a marketing budget should be 5%-20% of revenue. However, there's no way this can apply equally to unknown startups and behemoths like Apple or Coke-and all companies in between. So more relevant guidance is required.

Here's what I have found to be the five Big Bs of budget development, setting aside one-size-fits-all spending metrics:

* Business Objectives - Are your goals to build awareness and attract new customers? Retain and upsell current and past customers? Or drive leads, conversion and sales? The costs of a branding and buzz campaign can differ greatly from a direct response campaign.

* Buyers - Who is your target audience and best prospects? Where are they going, who are they listening to, what are they buying, reading and watching? How do they make purchase decisions? Market research may be needed.

* Brand Awareness - Are you engaging with current customers, familiar with your product/service, or building awareness with a new audience from scratch? Whether your business has high or low brand awareness will affect your marketing strategy.

* Brains/Bodies - The best plans will fall short if not executed well. Who will be managing the marketing program? Today's programs may require skills in creative, digital technology, media buying, direct response, public relations, metrics and analysis. Does your organization have the in-house expertise? Hiring salaried specialists can be expensive. It may be more cost effective to hire a marketing agency.

* Blueprint - Once the business situation and questions are addressed, the marketing plan can be developed. Tactics will range from Branding, Public Relations, Paid Advertising, (digital PPC, print, radio, television, outdoor), Email Marketing, Social Media, SEO, Direct mail, Telemarketing, Events, Webinars and Trade Shows. Each medium will have minimum of expenditures that are necessary to test or generate an impact. Once business resources and available funds are considered, the budgeting process unfolds.

Marketing programs and budgets will vary, based on the type of business and campaign. A consumer products company may invest in print, radio and television advertising and point-of-sale displays, while a b2b services company might be better served focusing its resources on trade shows and direct marketing.

So rather than asking how much to spend, the better questions are how and where to invest. Then you can develop a strategic, cost-effective approach to achieve your business goals. Ultimately, marketing's purpose is to build sales. Test and test until you find the formula for success.

Need some help? Call me and I'll help you develop a Smarti Solution.