When you are trying to come with your company’s first marketing budget, it can seem like an impossible task. First, you must decide how best to reach your customer base, how to track your expenditures and most importantly, you have to understand what is needed to determine your costs of customer acquisition and what roles these costs will play in increasing your marketing ROI (return on investment). Since sales and marketing are essentially one in the same, you know that having a marketing budget and a clearly defined strategy for marketing are prerequisites to success and are vital in increasing your market share.
In our series of articles, we will help you along by reviewing the process involved in coming up with a clear marketing budget. We will also outline the steps you will need to take to track the performance of your separate marketing strategies in order to dial in to your most cost-effective way to produce qualified leads. Having a marketing budget might seem like a confusing process, but in reality, it is pretty easy.
Define Your Market
The first and perhaps most important step in coming up with a marketing budget is to clearly define the market that you are after and its customers. Understanding the market and its makeup is a pivotal part of figuring out how best to reach your customer base. For instance, the B2B (business to business) market is drastically different from a B2C (business to consumer) market. B2B sales and marketing is predicated on meeting customers in person at conferences, trade shows and/or exhibits. This often has to do with the industry’s size, where vendors and suppliers don’t usually meet on a consistent basis. Whereas B2C sales and marketing is focused on competing against similar branded competitors within diverse, often smaller markets. This increased competition provides the customer with plenty of choices as to when and where they want to make a purchase.
You will need to start defining your market by examining your business model. Focus on answering questions that are concerning how best to reach your customers. Understand that not all markets are the same, and therefore, not all customers behave the exact same way. As such, there are different buying habits and different purchase decisions made in each market.
