Creating a marketing plan without a marketing budget is like building a house without a roof. The undertaking is unfinished and will not serve the purpose for which it was intended. Yet, many companies invest valuable time and personnel resources to craft a well-defined, strategically-sound plan that lacks the dollars necessary for implementation.

Marketing Budget Complexity

Establishing a marketing budget is a complex task, driven by many variables. If there was a set percentage of revenue or profits, the baseline would be easy to establish. But there isn’t. The numbers vary. According to a CMO survey, marketing budgets in 2018 fluctuated between 4% – 13.2% of revenue depending on size of the business, number of employees and industry. To add complexity, other factors that influence the size of the marketing budget involve the age of the organization, cost of goods or services produced, length of the sales cycle, number of sales needed, target markets, corporate structure and overhead, research and development needs, technical infrastructure and corporate mandates for investments or cuts. With all of these variables at work coupled with departments competing for limited funds, it’s no wonder why putting together a marketing budget is a daunting, and yes, stressful process.

30 Questions to Ask

So, where to start? Begin by collecting data and the answers to these key questions related to sales, marketing and business operations:

1. Do you already have a documented marketing plan or the tools to make one?
2. What are your short- and long-term business objectives?
3. How much has been spent on marketing in the past?
4. Do you have significant growth opportunities?
5. Which area(s) of marketing need the most focus? Product marketing? Public relations? Lead generation? Online outreach?
6. Which initiatives are you using now that resonate with audiences? Which can you do away with and which are you missing?
7. What are your competitors doing?
8. Who is your target market, i.e. who is generating demand?
9. Who is your target audience, i.e. who is in need of your expertise?
10. What are their demographics and psychographics?
11. How many people are involved in the decision-making process?
12. What are your target’s pain points, challenges, goals and typical objections?
13. How many leads are you generating per month?
14. How many leads convert to sales?
15. What is the cost of generating qualified leads?
16. What is the typical revenue that comes from a new customer/client?
17. How many website visits do you have per month?
18. Which metrics or CRM tools do you use to track and record data?
19. Are your marketing tactics, strategies and messaging aligned?
20. Which data, metrics and analytics tools do you use?
21. Are you distributing across many platforms and mediums?
22. Does your team understand the company brand, style and messaging most suited to your target markets?
23. Which platforms and mediums does your target market use most?
24. Do you have internal staff educated and capable of implementing your marketing plan?
25. What time, labor and resources are necessary to execute the plan?
26. How much would it cost to hire an agency versus using in-house resources?
27. Who are the internal stakeholders involved in the process?
28. Who needs access and input to ongoing reports and data?
29. Have you established target dates or milestones to help evaluate effectiveness?
30. Are roles, deadlines and goals clearly defined to your team?

Process Driven Marketing Plan

Use the answers and the information from this process to build a plan that includes a best-case, acceptable and minimal budget. Using those numbers, go back to the drawing board and see what initiatives are essential, where you need to cut, what you can delay and how you can innovate to get more funds. Remember, the goal of any marketing plan is growth. With a marketing budget in place, the key is to test, refine and re-test. Eliminate programs and initiatives that aren’t performing. Expand on the ones that are. Then make adjustments to the budget as necessary. Just like other key corporate initiatives, agility, flexibility, collaboration and communication help companies stay on track and manage their financial resources to their advantage.