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B2B INC.’S MEDIA AND TACTICAL ANALYSES WILL GIVE YOU BUDGET GUIDELINES AND ALTERNATIVES
One of the most often-asked questions we get it, "How do I determine or set my ad budget?" Let's look at some options...
Consider the "task" method of budgeting.
Some common b2b marketing budgeting approaches are:
- A percentage of expected sales revenue
- A percentage of last year's budget (up or down)
- A number given to marketing by top management
- The task method
We feel that the best way to arrive at your budget is the last one above, the "task" method.
Here's how this approach works in b2b marketing budgeting, and why it makes sense:
- You have certain objectives to meet.
- You have strategies defined to support those objectives.
- You've identified the best methods (your tactics) to act on your strategies.
- Those tasks are defined in your b2b marketing plan (under "tactics") and each has a cost. The total cost of those tactics is your advertising-marketing budget.
Tasks are scaleable to meet the budget you can afford.
So now you say, "Well, what if those tasks cost an arm and a leg? What if we simply can't afford to spend that much on our ad-marketing plan?"
Here are a few perspectives on that, and why the task budgeting approach is still, we feel, the best and the most flexible method of b2b marketing budgeting:
If a budget is too rich for the corner office, tactics can be trimmed while retaining their purpose: either trimmed down in scope, or maybe there's a different tactic available to achieve the same goal at a lower cost (example: online ads instead of trade magazines). Or maybe the frequency of a tactic is trimmed.
Scale your tasks, but don't dilute them, and don't lose your focus.
The key is, tasks must still be created to support the strategies that you defined. So, trim down maybe, but keep your focus.
Self-education is critical.
Your marketing staff needs to be realistic in terms of deciding on the tactics; both in terms of the scope and the cost of each tactic. Therefore, marketing needs to educate themselves (perhaps with the help of a good b2b advertising-marketing agency) on what tools (from sales tools to online presence) and methods are available out there to support the sales-marketing effort.
Education needs to be ongoing, as tactics - especially online ones - are changing constantly. This way, b2b marketing budgeting is viewed - as it should be - as a process, not a one-time exercise.
Sales + marketing.
A sound marketing plan is a sales and marketing plan, so some line items in the task list can (should) come out of the sales department's budget (example: a new CRM solution or a sales training program.) We stress once again the importance of sales and marketing working together on the marketing plan, and for top management to approve sales-cost budgets that allow for investments that support the sales effort.
Put marketing spending in perspective.
Be sure that you take b2b marketing budgeting seriously. You spend time to budget for other things, plan for other things, research new equipment or software or processes for your plant or office - so you should devote the same amount of effort and focus when it comes to your b2b marketing budgeting.
Why retain an accountant, a lawyer?
Why take your child to the dentist?
One final word regarding b2b marketing budgeting - and an argument you may very well have with your senior management. Your company no doubt relies on experts to help it along: lawyers, accountants, engineers. And if a child has a tooth problem, you don't take her to your next-door neighbor who knows first aid. So when it comes time to plan and budget your marketing and advertising - especially in today's fast-paced, ever-changing online environment - rely on experts in b-to-b marketing, whether it be a full-time marketing manager, and / or a business-to-business advertising-marketing agency.
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