How to Optimize Your Marketing Budget
According to the '2017-2018 CMO Spend Survey' report from Gartner, almost half (47%) of CMOs worldwide still depend on traditional marketing budgeting methods: they transfer the previous year's budget to the next financial period, increasing or reducing it according to different series’ of company-specific decisions.
However, this formula has become outdated because today’s marketing landscape has shifted. Marketing departments now have to create innovative strategies to keep up. The Gartner study reflects this shifting mentality: two-thirds of CMOs plan to increase funds in their digital initiatives, investing more in analytics, digital ads, e-commerce and social networks.
While calculating your marketing budget to achieve maximum results — all without wasting a single euro — can be a considerable challenge, there are a few things you can do to ensure you’re generating the best possible results.
Calculate your budget based on your expectations
Many companies set their marketing budgets by allocating between 1% and 10% of their revenues in relation to sales. You have to be very clear at what stage of the marketing strategy you are in and what you want to achieve with it. This will give you a ballpark idea of your Return on Investment (ROI). For example, investments in branding require significant resources, but it is an investment in the medium-to-long term.
If your strategy aims to achieve a generation of leads through registration forms, content downloads (such as an eBook, videos, etc...) and other value-added services, you should consider how many of those leads you hope to convert into real customers. Once you know what your expectations are, you’ll have some idea of how to go about exceeding them.
Organise your teams
It’s important to have a united team structure and clearly defined goals across your organization. The Marketing and Sales departments must work together, towards clearly stated common objectives. This is known as Smarketing.
Source: YumYum Videos/HubSpot.
Marketing teams must work to generate good Marketing Qualified Leads (MQL) for the Sales division. MQLs are leads that have shown interest in the company: for example, a lead has requested a meeting or contact with the company or has made inquiries about products/services. From there, the Sales teams will establish if that MQL becomes a Sales Qualified Lead (SQL), upon having made the appropriate evaluations.
If your Sales and Marketing teams are aligned, your chances of converting leads into customers are much greater than if each department works separately.
You have a budget and equipment, now put it into action
Once you have the necessary funds for your marketing strategy, and you have aligned your teams, it is essential to draw up a workflow. Coming up with this workflow entails organizing tasks within specific timeframes tracked according to particular metrics. We broadly refer to this process as a “Scrum.”
First, you have to identify the roles of each of the team members and define their responsibility in the project. Then, tasks get marked for action within a specified period according to their particular objectives (this is called a “Sprint”).
Every day, each team holds meetings to analyze the state of the tasks making up the campaign. And at the end of each Sprint, a “Retrospective’’ is held. What this means, is that in this meeting, the whole team analyzes what tasks have been carried out and what have not (and why), with the aim of improving the methods used to get the work completed. The purpose is to improve efficiency continually.
Measuring results: how to identify 'quick wins'
What investment in time or resources do you need? How much time do I need to start it? What economic investment does it entail? What key data can I capture? What is the expected return, both in terms of financial gain and brand building?
All of these are questions to ask yourself when identifying ‘quick wins' for your company. In general, quick wins are outcomes that are hugely beneficial for relatively little effort. This part of the process is all about formulating an implementation strategy that provides your business with a solid base on which to sustain and build future business.
An excellent way of identifying your quick wins is through the Pareto Principle, or “the 80:20 rule”. This principle means this is where 80% of the effects come from 20% of the causes. In a marketing context, it says that 80% of your results come from 20% of your efforts. It’s not a hard and fast rule, but it does serve as a rough guide to determine which strategies are more efficient at providing better results.
At We Are Marketing, we specialize in taking the confusion out of digital brand management & marketing to bring you fast and impressive results. If you want to create effective marketing plans but aren’t sure which smart digital strategies and online tools to choose, get in touch with one of our experts.