I would love to write a post about how to budget for B2B marketing that was really painfully simple.
I could say that making a B2B marketing budget was as easy as working out what you wanted to do (a hard enough choice!) splitting your costs into the various different ‘pots’ in the year, colour coding your spreadsheet and sticking it to a wall.
Unfortunately, its a little more complicated than that. Not only is marketing any business dynamic, it also needs to reflect relevancy. Some things are a ‘punt’ – some are evergreen, some are nice to have and some need time to grow and bear fruit. Some things simply don’t have an immediate ROI but need to live in your budget.
Having all the mathematical skills of a chimp, learning the best way to portion budget has been a steep learning curve for me. Back in the dark days of learning to be a marketing manager, I definitely stumbled when forecasting. That’s why I’m here to help you.
There are a few steps to take.
1.WHO is your marketing being delivered to?
No product is sold to just one person and every single human is at a different buying stage. As a B2B marketing manager, you see people who are just coming into the sector and being aware of you through to the people who are weighing you up against a competitor. That’s why it’s important to first look at where your budget is going based on who you want to attract. You probably have heard about different stages of marketing. I like to refer to these as LADCA – the areas your marketing needs to focus on 365 days a year.
- These are Looking – the people you want to attract. For this, you’ll be thinking about social media ads, PPC, press campaigns, out of home advertising, leaflets, letters.
- Asking – these are the people who are making sense of you and what you do. they are invested to some extent. These are the people who might be reading your blogs, subbing to your emails, watching webinars, meeting you at events.
- Deciding. These are the people who are even further down the buying funnel. They are looking at a business case for you. They have taken a trial. They are weighing up costs and looking to answers to serious questions.
- Finally – there are Customers and Advocates. You might think marketing has done its job here, but in reality, the customer loyalty piece often lands in marketing’s budget – with calendars ad goodies and events and showcases all coming into your budget!
It can be helpful to sketch this out really quickly – how important is each ‘type’ of persona acquisition to your business?
For a B2B solution, I would imagine something like the below.
Looking is unlikely to take all your budget – but asking and deciding will be quite key. The customer and loyalty element will take up less important than them all. This produces a shape
If we compare this to a coffee vendor, you’re looking at a very different budget proportion.
2. Apportion how relevant you think each media type will be across your buying journey.
If you have a product that you ‘grab’ such as water, coffee, a pair of trainers – you will need to do a lot to attract the ‘lookers’ but will have little trouble with the asking and deciding sections. If you are a B2B software solution, you are likely to need a lot of emphasis on the area further down the funnel.
B2B decisions are all about qualifying and ensuring you aren’t left with egg on your face. There are plenty of steps to take before you buy. When it comes to budgeting, that’s why it is helpful to have a spreadsheet that lists these personas down the left-hand side with activities you think you would like to undertake on the top.
Here as an example are the personas and columns such as Press, PPC, Social Ads, Social Organics, Blogs, Images, Events and Collateral. There may well be plenty others!
Before we look at how to dill it in – why do we do it this way – looking at the WHO and not the HOW?
- It sharpens your thinking. Putting down events in a normal marketing plan makes you think of lead gen. Events in this context makes you think about customers and advocacy. You might be compelled to ask the account managers what they would like to attend and to take a case for these activities.
- It makes you consider your year ahead tactically. Budgets are in April for many buyers. If you need to attract more people at this stage, you’ll want to be sure you have enough budget in your pot at this time.
- Forecasting is key. It makes no sense to pull all your money into attraction. Attracting leads over and over sounds great – until you realise you have no ‘meat’ to serve them. It also means a ‘feast and famine’ mentality – where you push out press releases and ads over and over – spending all of your budget on the ‘lookers’ and have nothing left in the pot to convert people further down the sales funnel who are your ‘deciders’.
3. Fill in the budget based on your new real insights
Taking the first sketch you have and your new plan you can get a rough idea of what you have to spend, where, and when.
Let’s say last years budget was £100,000 for the year. This year you need another 20 customers. You need to up your spend.
Take last years spend as a benchmark and input it into one column. Add a column for the next year.
Now is the magic. The percentages you have given each activity start to bear fruit as you can see that really, you need a good chunk of PR at the top of the funnel, but less in other areas.
(You can just proportion last years across the LADCA headings as you won’t have used them before.)
You will start to draw some conclusion that help you see that you might need the same for PR – or less. In this example, the spend is actually £500 less than last year – with clarity that you need it to attract and engage.
4. Break it down by month
The next step is to look at what you may have on in a year. This isn’t about detail, just concepts.
Draw down the months and then start to allocate funds based on what you can see coming up. You’ll still have in your mind that 70% of press is awareness. This will help you to assess when you need PR and what level. Let’s say that £3000 represents 100 credits with an agency and a bulk of stories, £1000 represents less work and £100 would cover of self-promotion on press release sites, or even sourcing images for the next bout of PR. Consider the year as a whole and preparation as well as the final moment of release!
This method was all done in Excel (no points for beauty here) and doesn’t take too long.
The key to the success of it all is forecasting based not really on last year, not on a hope – but on WHO you need and when.
You’ll see there is also a contingency budget as well. Put this in! Every year you will overrun so safeguard your budget with an elastic amount.
This produces, after some hard work, a spreadsheet that will
- Allows finance to see what is coming out when
- Allows your higher-ups to see where your focus is
- Gives you a reason to explain WHY a golf day entertaining 17 current customers doesn’t fit in your plan to make 20 new customers
- Helps you give more back to account managers and the whole business by skewing your thinking beyond the marketing bubble
- Helps you avoid chasing numbers around with a broom
I hope you have enjoyed it as much as it’s possible to enjoy looking at numbers on a sheet!
If all of this is too much like hard work – give me a call!