Creating a precise marketing budget is challenging, and any mistake could be costly. Just one blunder can throw off the company's entire marketing strategy. Also, you will most likely have fewer financial resources available for the budget than you wish. So it pays to understand the common errors businesses make when planning budgets.
With lots of knowledge and opportunities available to learn from, marketers are advancing in terms of connecting their marketing campaigns with business results. However, most companies still encounter significant wastes in their marketing budgets. Furthermore, only about 21% of businesses can successfully track the returns on investment in their marketing budgets. As always, the issue is not whether or not you know that you are wasting funds, but figuring out the blunders that may be draining you of your dollars.
Let us explore the most common mistakes, and how to avoid them to come up with a precise B2B marketing budget.
1. Failing to set clear objectives
One common mistake that B2B entities make when coming up with their marketing budgets is doing it without clear goals. You cannot budget for something you have not even defined in the first place. This could lead to underestimation of required amounts or over expenditure on marketing, funds that could have been placed to good use.
To avoid this, you need to work on your objectives and ensure that your marketing strategy is in line with the company vision. Afterward, you will prioritize all costs according to the established goals.
2. Failure to coordinate the marketing strategy with sales
You must develop your B2B marketing budget in conjunction with your sales, with each expense corresponding with a projected business outcome. Most companies, however, fail to relate the two. If you do not coordinate the budget with sales, you may end up with an advertising campaign with no positive, direct impact on revenue.
Fortunately, this pitfall is avoidable by prioritizing communication between your sales and marketing departments. Notably, a broken sales funnel could also impact your marketing strategy and lead to failure regardless of your investment in it. Therefore, you should test it regularly and make any necessary adjustments.
3. Experimenting too much
Chances are you may not stumble upon the ideal marketing strategy on your first attempt. Most of the time, you may have to tweak and alter it till you finally push through and achieve the anticipated result. However, always be aware of the limits on how much you experiment. You simply cannot adopt any random approach to determine if it will stick because it will not.
There exists no magic wand for this common mistake relating to B2B marketing budget creation. Most of your efforts, however, should adopt a data-based approach where the budget is based on your strategies, goals, and available information.
4. Tweaking the previous year's budget
Interestingly, most companies make the mistake of viewing the marketing budget as any other filling exercise. As such, they end up leaving it to be handled at the eleventh hour, and the role assigned to a particular marketing executive. Due to the pressure to deliver, there arises the temptation to make a few adjustments to last year's budget, and they may cave.
Marketing strategies, goals, and activities vary year after year, and so do human resource needs, market trends, technology, prices, and numerous other factors. Therefore, you need to reexamine your business goals annually, creating new budgets for each goal. To make it easier, you can involve every party that requires a marketing budget for this activity. You can also jumpstart your planning by leveraging marketing budget templates.
5. Investing less in proven workhorses
Let us use a common example. Email marketing may be hailed as one of the top channels that entities use to reach and engage prospects effectively. Come budget time, however, it is among the marketing tools that are most overlooked. After all, if it is not broken, it should not be fixed, right? Wrong.
Efficient, well-performing channels are likely to go stale with time if they are not given consistent attention. Why? Because you will always find room for improvement – like better personalization, testing, or automation. Therefore, you should pay attention and keep investing in tried-and-true marketing strategies.
6. Using bad data
Every marketer understands that budget planning is a science and an art, as well. Marketing, as a science, is not exact. This is because you may be required to run with the gut feeling while taking risks time after time. Still, this is nothing less than a shot in total darkness. This means the company will rely on analytics data a great deal. But just having high quantities of information does not guarantee quality.
Therefore, you must implement proper cleaning strategies to get rid of dirty data manifesting in forms like inaccuracies, or duplicate data. With an accurate data set, you can make informed decisions and come up with an accurate budget for your marketing campaign.
7. Solely focusing on new customers
As a marketer, you may be accustomed to tremendous pressure to add prospects into the company's sales funnel, generate new leads, and increase sales revenue. However, it will cost you between about five times more to gain a new customer compared to retaining an existing one. Another research by Bain & Company's Frederick Reichheld shows that a 5% increase in customer retention rates could increase your profits by between 25 – 95 percent.
From both statistics, it makes sense that you avoid spending more time and resources finding new clients. You only need to keep the ones you already have happy and satisfied.
8. Failing to evaluate your strategy
Some companies do not evaluate their marketing strategies, and most do this very rarely. Both are massive mistakes since there is no other way of evaluating the effectiveness of your efforts. Also, you cannot ascertain whether the budget has been put to good use unless you regularly evaluate the current strategy.
Apart from carrying out an in-depth analysis of your marketing practices, it is also important to look at the execution and evaluate whether all the tools available at your disposal are used effectively. Sure, you may need to sacrifice more time and funds, but this could be your best investment.
Marketing is one of the fields experiencing constant expansion and changes. This requires consistent learning and making the most out of your investment in your ad campaign. All these tips should guide you in coming up with the right B2B marketing budget. You will also be able to avoid the common mistakes that may limit your success in reaching a wider audience.
Whitney is a natural leader with a knack for creating something out of nothing. She’s helped dozens of brands gain greater recognition for their causes and products in the digital world. Whitney’s experience doing literally every job Beacon offers, from graphic designer to operations to web developer means she’s not afraid to roll up her sleeves and dig in when it comes to helping Beacon’s clients build the future of business.