Your Marketing Budget will depend entirely on what you want to achieve with your business over the next few years….
When setting a Marketing Budget, most companies I visit seem to go through a process of looking at what they did last year and ‘tweaking it a bit’ up or down depending on circumstances.
Alternatively, they take an arbitrary % of sales, say 2% and allocate this to marketing.
In my experience, both of these approaches are completely wrong!
The Marketing Budget flows out of your Marketing Objectives and the strategy you adopt to achieve these in your Marketing Plan.
So, without developing your Marketing Plan, to some extent you are developing your Marketing Budget in a Vacuum. See here for more information about Developing a Marketing Plan.
Of course, you need to review and evaluate what was achieved with your Marketing Activity undertaken last year, but then, having learned from it, you then put it to one side and start again!
By carefully setting your new Marketing Objectives, Agreeing Segments to Target and Developing a strategy to achieve these Objectives, you have done most of the work in Developing your Marketing Budget.
You just now need to develop an Action Plan outlining what needs to be done to achieve the Objectives, When it will be done by, Who will do it and if there is a cost-how much will that be…
So once the Action Plan is completed and costed (where appropriate) just add up the column in the bottom right hand corner and you now have your Marketing budget-not based on what you did last year or an arbitrary % of Sales, but on what you clearly want to achieve with your business this year….
You know it makes sense!
If you need any further help with developing your Marketing Plan or your Marketing Budget please get in touch.