What Does Your Marketing Budget Reveal about Your Business?

Did you know? Your marketing budget always tells the truth about the priorities in your business, even if those priorities don’t align with your stated goals!

Q4 is a great time of year to take a fresh look at WHAT and HOW you spend on marketing. This exercise will help you determine whether your marketing budget aligns with what you want to achieve the most in the year to come. Below, we’ll explore a couple of common areas where we see opportunities for budget realignment.?

Here’s a hard truth to kick things off:

We all have limited funds for marketing. And even with unlimited marketing funds, there wouldn't be time and & focus to do everything. This means making tough decisions in key areas.

What it feels like when you want to accomplish everything, everywhere, all at once with your Marketing…but you just can't.

What the Mouth Says vs. What the Money Shows

? What Companies Say They Want: Revenue Growth

? What Their Marketing Budget Says: Keep the Status Quo

At The Marketing Blender, we are often asked how much companies should spend on their marketing. The benchmarks vary based on industry and other factors. For example, pure SaaS companies often need to spend more on marketing than professional services firms. However, here are some general guidelines:

• Allocate 7% of revenue to Marketing to keep from losing ground
• Allocate 10% or more of revenue to Marketing for business growth

Putting more money toward marketing can be challenging and sometimes frightening. But if you are bootstrapping, revenue growth requires re-investing in the business. This means taking a temporary hit on profitability to fund the initiatives that drive growth. If you are prepared to make that reinvestment, you’ll want to ensure the extra marketing budget is really driving revenue growth.?

Which leads to the next point…

? What Companies Say They Want: Lead Generation

? Where Their Marketing Budget Is Going: Brand Awareness

We commonly encounter companies that say they want to generate leads but hesitate to fund that effort in a meaningful way. Brand awareness tactics (top of funnel) are often the most fun, creative, or emotionally rewarding types of marketing. It can be tempting to throw money at flashy campaigns that showcase the brand but don’t necessarily build the business.

• This can look like spending on expensive trade shows that aren’t generating new opportunities.
• Or, it might look like a major push to grow thought leadership that doesn’t tie into a larger strategy.?

But what if the bottleneck on revenue growth is not poor brand visibility but the lack of a robust lead generation engine and ecosystem? When lead generation is the main problem hindering growth, spending money to solve it is? essential, not optional.

Be prepared to budget for building a system that keeps working and scaling as you grow. That’s very different from throwing some money at a campaign and seeing if it helps with short term sales activation.?

This diagram can help you visualize where the bottlenecks are in your revenue generation and where to allocate more marketing spend.

My Top Tips for Getting More from Your Marketing Budget

?? Clearly define and document your business goals in terms of revenue growth, profitability, new customer acquisition, customer retention, and more. Decide which goals are most important to the growth and resilience of your business.

?? Align the size of your Marketing budget with your desired goals (growth vs. maintenance). Don’t skimp on funding for Marketing if you intend to hit your targets.?

?? Divide your Marketing budget into buckets for different stages of the buyer journey (Awareness, Consideration, Decision, Retention). That way, it isn’t just a slush fund that can be pulled from to pay for the latest “shiny object.”

?? Clearly define which Marketing activities are the true priority to overcome the biggest growth obstacles (e.g., visibility, traffic, conversions, lead gen and nurture, sales support, etc.).?

?? Prioritize marketing activities based on speed to revenue impact. For example, if you are leaking leads during the later stage of the buyer journey, don’t focus on putting more in the funnel until the leak is fixed.

?? Put the majority of marketing dollars toward those areas of your strategy that will overcome the biggest revenue obstacles. Run toward the problem you are trying to solve

?? Know which KPIs to track for each tactic and monitor these to see if your spend is delivering results. Understand the time frame over which you should evaluate each tactic so you know when to double down or when to pivot.

Want to talk with me about your marketing budget and the best way to spend it to drive revenue? Grab a time on my calendar to talk .

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