The REAL questions you should be asking yourself when trying to determine your marketing budget.
Someone raised an interesting question to my AltMBA community recently. They were in the midst of building a brand new business and were polling our shared network to find out what tools we used when we first start developing a marketing plan.
The question went something like:
Does anyone have a basic tool and/or guidelines for building a marketing budget? I am working on a new project with a new team and wondering if anyone has tools they use at the very beginning to get started.
Some people shared cool spreadsheets, task lists, and helpful physical products.
I had a few questions that were far less tangible than spreadsheets and pdf’s, but are equally effective at getting you started.
The real thing you need to choose your first marketing budget isn’t a tool or spreadsheet.
My answer went something like this:
I don’t have any explicit tools in mind, but I like to start by figuring out what my goals are with my marketing & work backwards.
I’ll ask myself things like: am I trying to reach a certain # of people, or make a certain # of sales, etc…
This is especially helpful when you have a blank slate on a project/team and don’t have any historical data when picking a baseline. At the least you can find standard estimates for reach, CTR and other metrics to ballpark from if you know how many people or sales you need to hit.
Interestingly, when she saw my response she had just come out of a meeting where they committed to a facilitated and structured process to help them step back and develop the company’s “why” and the blueprint that will inform their branding and marketing. (aka, nailed it!) We were on the same page about first finding out who they are marketing to, and what their goals are.
Start at the End, Pick your Goals First.
Your goal can be as simple as building an email list to 1,000 people, or getting 1,000 followers on a social media account, or getting 20 subscriptions for my product. It’s actually best to start with a goal that is not too lofty so you don’t get discouraged trying to make $1,000,000 in sales in the first 2 months of your business. Think ambitious, but reasonable.
The best part about working backwards from your goal (rather than picking an arbitrary budget number), is that I usually find out that some (or most) of my goal can be reached by just being scrappy & going for organic growth. You may find you don’t need half the marketing budget you thought, and it helps show you where you can make strategic investments to reach your goals faster or more efficiently.
To get you started on this process ask yourself the following questions:
Who am I trying to reach?
What’s hard about reaching these individuals?
What kind of change do I create for these people? (this could also be thought of as, “what problem do I solve?”)
These questions help you start to develop an understanding of the why behind why you do what you do.
Keep this in mind when interviewing new team members to work on your marketing materials too. If someone is going to develop a marketing plan for you and asks you about your budget first but not about the customer you are trying to reach, you may need to dig deeper.