What are the key factors that influence your demand generation budget planning?

While it may be tempting to map out your goals from the top through the bottom of your funnel, experienced demand generation teams start with sales booking/renewal goals first, and work their way backwards. A key consideration when setting goals for each conversion metric are applicable constraints. For example, are your net new booking goals restricted to customers in a particular industry or geography? Do you Sales Qualified Leads (SQL) need a call to confirm before they're handed off to your sales reps? Consider your company and industry specific constraints when setting demand generation goals for each stage of your sales and marketing funnel, starting with your desired monthly/quarterly revenue goal and working backwards.

Key factors influencing demand generation budget planning include: Business Goals: Aligning the budget with revenue targets and market expansion plans. Target Audience: Understanding demographics and preferences to choose effective channels. Historical Data: Analyzing past campaign performance and conversion rates. Market Trends: Staying competitive by keeping up with industry standards. Channel Effectiveness: Allocating more budget to high-performing channels. Customer Acquisition Cost: Ensuring CAC aligns with customer lifetime value. Technology and Tools, Sales Alignment, Content Strategy, Brand Awareness, Testing & Optimization.

A critical part of setting your demand generation goals is communicating them to those that hold the purse strings –?and fair enough. It's not enough to say "We're allocating 80% of our budget to growing awareness and affinity in the 97% of buyers not yet ready to buy." You need to tell a story as to why and how that awareness will contribute to financial outcomes. If it's six months, show that. Provide a forecast which shows the downstream impact of starting to generate demand now. By the time pipeline starts coming in, you and the business can judge your efforts based on the delta between forecast and actual. It's fair and measurable –?unlike running lead gen campaigns forever and trying to retrospectively diagnose why things failed.

- Business Goals and Objectives - Target Audience - Historical Performance Data - Marketing Channels - Competitor Analysis - Customer Acquisition Cost (CAC) - Sales Funnel and Conversion Rates - Technological Investments - Content Strategy - Market Trends and Seasonality - Testing and Experimentation - External Economic Factors

When planning the budget for demand generation, it's crucial to closely tie it to your business objectives and revenue goals. Understanding your target audience and their preferences is essential for selecting the right channels. Historical campaign data provides valuable insights into what works best. Keeping an eye on market trends helps you stay competitive. Allocate resources to channels that deliver the best results. Ensure that your customer acquisition costs are in line with the value they bring. Additionally, consider leveraging technology, aligning sales efforts, refining content strategies, boosting brand visibility, and constantly testing and optimizing for success.

In programs that we audit for customers, a very common scenario we come across is either target audiences that are too broad, or too many different audiences. You may have a large TAM (Total Addressable Market) but that doesn't mean you can deploy your budget to that entire group. Demand gen spend, especially now that the VC funding is harder to get, means that your budget has to go far, but it also has to go deep. You can't create awareness with a budget that is thinly spread across a very wide selection of audiences. It's much better to take a small subset of that group through a complete journey with you than to get all of them to see just one ad.

Understanding your target audience is important in shaping demand generation strategies. By tailoring your approach to meet the specific needs and preferences of your audience, you can significantly enhance engagement and conversion rates, optimizing your budget for maximum ROI.

Beyond demographic segmentation, invest in psychographic and behavioral analysis to understand the core motivations of your target audience. Consider using part of your budget for in-depth customer interviews and surveys to uncover insights that can dramatically shift your strategy. This deeper understanding can lead to more effective targeting and personalization, maximizing the impact of every dollar spent.

I prioritize capturing active market demand first. SEM plays a pivotal role in this strategy. Many businesses miss out due to suboptimal SEM approaches. Brands often neglect SEM compete strategies where they can be bidding on competitor keywords, overlooking prime engagement opportunities with top-quality leads. Post active demand optimization, I focus on upper funnel channels, aligning them with specific buyer journeys. Content suitability for each channel is crucial, as audience preferences vary. Brand awareness also guides budget allocation; established brands need a smaller share compared to newer ones. By aligning strategies with buyer behavior, I ensure effective budget utilization, maximizing results in demand generation efforts.

I always believe there is a difference between spending and investing when it comes to paid acquisition. When you choose the right channels and utilize them effectively, you can attract more people to what you're offering without wasting money.

Choose the right mix of channels (social media, email, content marketing, paid ads, etc.) based on where your audience is most active and what will drive the best results.

In building my personal brand, my experience has shown that it's crucial to find the perfect tools that align with my goals and budget, ensuring they truly help me connect with people.

A very important lesson in demand gen is that it is not the result of a tool. Running a demand generation program can and usually does depend heavily on the resources you already have. The secret to finding and generating interest doesn't come from tools, especially the ones that promise it, like intent tools. These are all additional ways to improve your chances but they are not silver bullets. Those who look to tools as a solution generally underperform against those who roll up their sleeves and learn about their target audience. Once you have a good foundation, you can scale it with tools, but they should follow strategy and not create it.

Tools that integrate together are also important. Your ABM platform(s) should be able to easily pull data from each other. Automating Dem Gen loses its touch if you're constantly importing and exporting CSV's (also can get messy).

Outside of just the core implementation team, it's important that you understand how your sales is going to help support your strategy. - Will they provide insight into the content or help draft it? - Will your sales team help spread your content via their own LinkedIn channels? - Are they going to share customer pain points or feedback? Without support from the sales team, your demand gen strategy won't be as strong as it could be.

Your team's expertise and size will impact your budget. A skilled team can execute more complex strategies but may require a higher investment in salaries and training. Balance your team's capabilities with the budget available for optimal results.

Decide whether you'll rely on an in-house team, external agencies, or a mix of both. This decision will impact your budget in terms of salaries, agency fees, and other related costs. Also, consider the need for specialized skills, such as SEO or video production, which may require hiring additional staff or outsourcing.

Numbers whisper, they don't scream. Ditch industry averages, dig into your customer data, your unique funnel leaks. Where's the friction? What hidden opportunities lie in conversion gaps? Treat your budget like a treasure map, not a roadmap. Track industry trends but prioritize your own data compass. Invest in channels igniting engagement, not just clicks. Nurture leads sparking genuine interest, not just curiosity. Quality over quantity, ROI over vanity metrics. Benchmarks are snapshots, not prophecies. Budget for agility, not rigidity. Be ready to pivot, experiment, double down on what resonates. Your data, not some generic statistic, is the truest predictor of success. Embrace the detective work & unearth your unique demand goldmine.

Factor in the potential return on investment (ROI) for each initiative to ensure your spending aligns with expected outcomes and contributes to overall business growth.

Craft custom benchmarks that reflect your unique business context and competitive landscape, rather than relying solely on industry averages. Use these tailored benchmarks to guide budget allocation decisions and to set realistic yet challenging targets for your team. This approach encourages a focus on continuous improvement and strategic agility.

In order to benchmark properly, it is important to clearly define each of your metrics. For example, what are your team's definitions for an MQL, SAL, and SQL? If you define an MQL to be a lead, which, has one marketing conversion, but a benchmark report you find defines an MQL as someone who has two marketing touchpoints, then you will, of course, not be able to make a relevant comparison. Make sure you have a clear explanation for your KPIs and why you have defined them in one way vs another. Expert marketing and guides can help you make the most appropriate decisions here. Keep in mind, however, that what is the norm in your specific industry, may be completely different in another one.

Demand-gen must balance two elements: -- What works for your prospects. -- What works for your business. It's very easy to focus excessively on one or the other when it comes to allocating budget. But you need both.

Don't forget your demand Gen patience! For many businesses with sales cycles of 3 months or greater, an effective demand gen strategy requires having a longer-term outlook. Many companies underestimate their actual sales cycles, so be prepared for multiple quarters before seeing closed deals from your efforts. This doesn’t mean you can sit back and hope for deals to come through. In the short term, measure key milestones including how many qualified contacts have been identified, the number of interviews with key decision makers (and market intelligence from these conversations), the number of MQLs, SQLs etc. Measure and adjust your tactics in the short term but don’t lose site of the long-term prize of winning new clients.

In my recent project, we experimented with LinkedIn for demand generation. Despite previous unsuccessful campaigns, our new strategy led to a significant increase in engagement among a niche audience that we hadn't effectively reached before.

A couple of more things that i can think of are: 1) Consider seasonal fluctuations in demand and adjust your budget accordingly to capitalize on peak periods and optimize spending during slower periods. 2) Cost per Acquisition (CPA): Calculating the cost per acquisition for each marketing channel will help determine the budget allocation based on the expected return on investment (ROI).

Not to miss out, the maturity of understanding on Demand Gen ROI timeline of sponsors and stakeholders. Merely providing lists, email automation tool or SalesNav license with an expectation to setup an engine that delivers 'sales ready leads' doesn't work in high ticket clients.