Posted at Aug 23, 2018 10:46:00 AM by THAT Agency | Share
There's good news and bad news from the world of marketing today. The good news is that marketing budgets, on the whole, are increasing. One study recently found that the average marketing budget has increased by 12% of revenue. You now have more resources to cover those marketing costs and create the brand awareness necessary. Ready for the bad news? You're still going to have to justify your marketing budget plan so you can get it approved. While budgets are increasing, there is never an endless pot with which to cover marketing costs.
How to Justify the Use of Marketing to Increase Revenue for a Business
With the following tips on how to justify your marketing budget plan, you’ll make your case:
1. Present the numbers from other companies.
Understanding what other companies in your vertical are currently spending is key to showing management that you're well within the ballpark on costs. Keep in mind that if your competitors are investing quite a bit more in marketing than you are, you could be at a real disadvantage. They could be attracting customers you're missing thanks to a smaller overall budget.
2. Think trends.
Where would you be if you hadn't created a website two decades ago? Understanding what is changing about the way the world works today is essential when it comes to marketing. It's the reason companies launched into social media, video marketing, and more. Know what is coming so you know where to find your customers - and show the power of those trends to your boss.
3. Leave last year's marketing fails in the past.
Remember that great idea you had that just didn't pan out? You'll want to reallocate those dollars somewhere else this year, and show your boss what you've done and why in terms of a course-correct and revised strategy. Look carefully through last year's numbers to ensure those ideas that didn't work as well are eliminated from this year's plans.
4. Add the data.
Hopefully you're keeping a fairly close eye on your key performance indicators. Those can be incredibly helpful as you work to justify your budget. Look at indicators like sales growth, retention rate, acquisition costs, and the lifetime value of a customer, as well as how those numbers have changed to help prove what you're doing is working.
5. Consider an open-ended Marketing budget Plan.
Your numbers shouldn't be your way or the highway. Instead, leave part of your marketing budget plan open to discussion with your boss to come up with the right numbers. He or she will appreciate the invitation to collaborate.
The ability to justify marketing costs is critical. Use these tips and access the resources you need to succeed.