24/10/2022
According to the 2021 CMO Survey, organizations spend between 10.4% and 13.7% of their total company budget on marketing, although that number varies a bit from industry to industry it’s a good idea of how much you should be spending on your marketing. It’s important to consider that new businesses (less than 5 years) should increase that percentage to up to 20% until they become fully established.
Once you have a good idea of how much a new lead costs you and how many of those leads you’re likely to convert into customers it will be much easier for your to build your marketing budget around those figures and realistically achieve your goals. To figure out which channels are paying off the most, and where to place more of your budget, you’ll need to track attribution to see where your leads are coming from. Even though it’s often impossible to attribute a single channel for an incoming lead, good analytics tools can help you determine which channels perform consistently well and which ones are a waste of time and money.
It is also important to factor other marketing costs into your budget such as automation tools, overhead costs, ad management fees, agency fees, etc. but that’s a topic for another post 😂
If you’d like an easy way to calculate your marketing budget using the formulas discussed in this post, DM us and we can send you a quick cheat sheet with these formulas for your future use.