Your marketing team members get all the love. They have great budgets, get their name in lights and have tons of support from management. For all their virtues there is one thing most marketing departments don’t do well. Budget.
Here are the three most important marketing budget numbers that all marketers need to pay attention to.
1. Costs –
Donald Trump is right. Wealth isn’t accrued by how much you make, it’s accrued by how much you can save. This is no different with your marketing budget. Marketers spend tons of money on things – media buys, advertising, staff, creative pieces, consulting, special events and more. No wonder them and accounting hate each other! Good marketers don’t necessarily need to reduce their costs, but they need to make sure whatever they spend money on can be attributed to increased sales. Any marketing tasks that can’t be attributed to sales should be looked at closer. Remember, marketing’s job is to bring in opportunities for sales. Therefore, each expense needs to be scrutinized for how well it’s bringing in sales opportunities.
2. Marketing Originated Customer % -
Not all new business comes from marketing. Some are referrals, upsells to existing customers or other existing channels. If you want to see how well your marketing is doing at bringing new people in the door then you need to pay attention to the Marketing-Originated Customer percentage. Divide new customers from leads by total new customers and multiply by 100.
Total new customers in a month = 25
Total new customers that started as a marketing lead = 10
Marketing Originated Customer % = (10/25) X 100 = 40%
3. Customer Acquisition Costs –
Some marketers, particularly those in tech, argue that this is the most important marketing budget number. Your customer acquisition cost is the amount your marketing department spends each month divided by the number of customers it receives each month. Managers often debate what marketing expenses to include in the overall ‘marketing costs’ total, but we include all expenses. After all, the marketing department only exists to win new business and acquire new customers. Every one of their tasks – charitable donations, marketing campaigns, luncheons, paid-search ads etc are all used to generate awareness and new customers for your business’ product or services.
Controlling your marketing budget is the key to marketing success. With so many consultants, agencies, products and services available it’s very easy for marketers to go over budget in a hurry.
Don’t let that be you! The first step in your marketing budget template needs to be figuring out what you do in-house and what gets outsourced. Get the calculator below!