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Managing a marketing department often means having to prove that your marketing budget is money well spent. Since the ROI of marketing isn’t always obvious, it can be easy to get caught up in the never-ending cycle of reacting to analytics and reports. Chasing visitors, followers, subscribers, leads and sales can become a game of chasing fleeting metrics instead of thoughtfully executing a plan to accomplish the big-picture goals of your marketing department.
This is a problem that can be solved with two vital documents: a structured marketing plan and a marketing budget. In this post, I'll outline the approach we recommend for creating a budget, but first to prompt action here's the answer to that question at the top of article - how does your sales and marketing spend compare to these businesses?
If you’re wondering how much of your company’s overall budget you should be aiming to allocate to Sales and Marketing, you might want to see how the biggest publicly-traded companies invest according to their annual reports:
Let’s now look at your marketing plan. Your marketing plan should be revisited every year — seriously revisited, not just a cursory update of dates to fit the present year. This marketing plan, informed by and aligned with your company’s overall goals, lays the foundation for your budget. A strong marketing plan translates to an effective marketing budget that ensures that those goals are being well served.
These two documents should be what drives your marketing team’s daily tasks, not reaction to momentary up-ticks and down-ticks in various metrics.
Writing your marketing plan involves establishing goals for the coming year, doing competitor research and deciding which tactics you’ll be focusing on to grow your company that year.
Take a look at how your brand is portrayed across all iterations — is it consistent? If there are inconsistencies in branding, that might be where you need to allocate some of your budget going into the next year. What about your email marketing — when was the last time you audited your email lists? These are the types of questions you’ll face when you go through a thorough review of your marketing plan. Need a head start? Here’s a full guide to writing your marketing plan.
An important element in finalizing your marketing plan is getting company leadership on board, from the top down, and including input from other departments. In a Kissmetrics article on building an effective marketing department, Chloe Gray stated, “For most companies, a truly good marketing strategy is one that integrates marketing into other key departments like sales, product development and human resources.” You’ll have a better chance of getting buy-in from everyone if you incorporate input and feedback into your plan from the beginning.
Once your marketing plan is established and you have buy-in from key company stakeholders, you’ll be ready to get into specifics of your budget. Using your marketing plan as a guide, allocate your budget for each area of your marketing department and then break it out by month.
Depending on the size of your marketing department and how your company structures budgets, your marketing budget may or may not include personnel costs such as salaries for your marketing team. Regardless, you’ll want to take into account not only obvious things such as website redesigns, new business cards and advertisements, but also digital marketing tools, event promotion and public relations.
The question of how your team should spend its time should be a direct reflection of your marketing budget breakdown. Break down your monthly totals into weekly hours and daily game plans. Keeping track of your hours in this way will ensure that your time is being spent in service of company goals and departmental goals — which you’ve already ensured your company leadership has agreed upon. Nice job.
Following this goals-first, strategic approach to your marketing budget, your marketing department will be well-positioned for a successful year.
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