With the right approach to building a marketing budget, B2B companies can clarify their business development goals, gain organizational direction for marketing and position themselves for more profitable growth.
B2B companies developing marketing budgets are doing so in a time of great flux and change:
- Because of the Internet, the way that people buy is changing. In the recent past, when a customer was researching a purchase, they had to interact with a salesperson fairly early in the buying process to get product information. At that point, the salesperson could exert a lot of influence as they pulled the prospective buyer down the sales funnel. Now, however, buyers can research most of a purchase without having to first make contact with a company or their sales person. On the Internet, buyers can research prices, reviews, product information, etc. In fact, studies show that in B2B purchases, buyers can be 75% through their research before they first contact the seller.
- People hate being marketed to, and now they can do something about it. Previously, outbound marketing tactics could interrupt prospects with cold calls, advertising, direct mail and unsolicited email (i.e. spam). Now, thanks to things like caller ID, DVRs, iPods, RSS readers, satellite radio and Do Not Call lists, people can exert much more control over what marketing messages they receive. As a result, outbound marketing tactics are becoming increasingly less effective. And, trade show attendance is declining.
- The changing dynamic of how people buy is forcing marketing to play a bigger role in the sales process. In the past, marketing generated and handed off leads to sales, and sales would finish pulling the prospect down the sales funnel. But with sales now being contacted much later in the buying process, marketing has to play a bigger role during and after the sale. As a result, marketing is now being held accountable for revenue and other business metrics.
The answer to the question of how much to budget for marketing is the same as how much it costs to build a house: it depends. There are numerous factors at play such as a company’s goals, objectives, financial situation and competitive landscape.
However, there are some best practices that apply to all companies when developing their marketing budgets. In a Silverpop whitepaper, an approach is outlined for developing a budget amidst all this flux.
Here are five key points B2B companies should consider when developing a modern marketing budget:
- Get buy in from management and define success. Don’t assume that the C-Suite understands how sales and marketing has changed. Also, get some clarification about the company’s goals and objectives. How will management be defining success each quarter and a year from now? From just that one conversation, marketing goals and objectives can be better aligned with the company, and more effective.
- Look at last year’s results. Look at what closed the most business last year and make adjustments. One of the best ways to review results is with a candid conversation between the sales and marketing folks.
- Plan for more marketing technology than you have in the past. Gartner predicts that by 2017, marketing will spend more on technology than the IT department. Marketing automation solutions are where much of the advancements are occurring. This technology enables companies to manage the intimacy and engagement with customers based on their behavior and purchases. Additionally, marketing automation provides deep insights into which marketing activities are working, and which are not. If you are not yet using a marketing automation platform, plan on getting one.
- Plan ongoing marketing training. The marketing technology is just a tool, and only as good as its operator. With all the technological advancements occurring every month in marketing, training is more important than ever. Budget for it.
- Start thinking like a publisher. Content (e.g. blog posts, whitepapers, videos, etc.) is becoming an enormous part of marketing. And it’s not going away. Most companies are beginning to budget for the management and production of the content that is now very important in the buying process.
What do you think? What has been your experience when developing a marketing budget? Please share your comments below.
Click here to download a copy of “Building the Best Marketing Budget for Today’s B2B Environment” or view the SlideShare version below.
photo credit: wadem via photopin cc