Marketing is a critical branch of any business, yet it can drain your budget faster than anything else. It can be tempting to chase revenue by marketing more, but what you need to be doing is marketing better.
Ready to get started integrating budget monitoring into your marketing plan? Then it’s time to use this guide to get started:
Budget monitoring 101
If you don’t keep an eye on key elements of your business, they’re bound to run off the rails. This is true for your inventory, your sales, and, yes, your marketing. Monitoring your budget means keeping track of where all those expenses are going and ensuring that they’re being used effectively. That’s why every budget monitoring strategy is made up of two key elements:
Budget allocation
The most essential part of any budget allocation strategy is that the budget in question is being put to good use. Take, for example, direct B2B marketing. You can just throw money at your teams to manually chase up leads and work to acquire clients, or you can put that money more effectively towards the tools that will help them most effectively.
For example, you can set aside a budget for the best sales enablement software to give your direct marketing and sales teams the tools and training they need to land clients and make big sales.
Budget setting
Another critical aspect of budget monitoring is setting your budget, which can change year-by-year or even at a moment’s notice. Around 47% of polled marketing teams expect their budgets to stay the same. It’s essential to be aware of what’s done with those budgets and how money is allocated within marketing channels.
Image from Hubspot poll
Why you need budget monitoring in your marketing plan
You need budget monitoring in your marketing plan because, without it, your marketing costs can outweigh your profits. This is true even when selling profitable digital products that come with minimal overhead, as marketing budgets can still balloon to the point where profits dip into losses.
That’s why comparing your marketing budget with your total profit is always important. Understanding revenue vs profit is one of the first things you need to grasp as a leader, and revenue retention and how you continue to profit from customers over time is also critical. For example, if the cost to acquire a customer outweighed the incoming revenue, you have made a loss.
You need your marketing to increase your profit margin and budget monitoring strategies are the best way to do this.
However, ensuring your products or services remain profitable is just the start. Investing in top-budget monitoring strategies also helps with the following:
- Compliance: You can easily comply with regulations by maintaining financial accountability and transparency.
- Budget adjustments: Track expenditures against budget, revenue, or profits to see immediately where adjustments are needed.
- Risk management: Spot and fix deviations in the planned budget and misallocation of funds quickly.
What makes up an effective budget monitoring strategy in marketing?
A few key elements make up any effective budget monitoring strategy.
Budget categories
It’s essential to split up the budget into different categories. Set aside a budget for content creation, advertising costs, account-based marketing methods, etc.
Budget period
This is how long the budget is designed to last. You can create budgets for the year or even for the quarter, which can be helpful when adjusting your budget to inflation.
For example, in spring 2023, when inflation was higher, around 52% of businesses reduced their marketing spending, but by the fall of that same year, that number fell to 45.1%. By segmenting your budget into quarters, you can adjust your budget based on external factors like inflation to provide your business with the highest ROI.
Smart tracking tools
There are many intelligent tracking methods that you can use. Virtual cards that are assigned to team leaders are one method. There are also specific business budget tracking software that can help you easily manage spending (and even compare it with revenue and then profits) with fewer errors than relying on spreadsheets alone.
Smart overhead spending
Your overhead is the ongoing, essential cost you must consider when creating a budget. A simple, effective way to reduce those fixed costs and free up more of the budget is to use powerful tools like an ABM platform to streamline lead acquisition.
Try to consolidate those tools into as few platforms as possible. An all-in-one tool that tackles many elements of your lead generation, sales, and marketing typically costs less while ramping up productivity and possibility.
6 budget monitoring strategies to start using today
There are several key budget monitoring strategies you’ll want to integrate into your marketing plan today, so pick and choose from this top-recommended list:
1. Segment your marketing budget
You first need to factor out fixed costs to segment your marketing budget. From there, you’ll want to adopt the 70:20:10 model, where 70% of your budget goes towards tried-and-true methods, 20% on new campaign ideas, and 10% on experimentation. That 10% can also be used as an emergency fund.
For example, that 70% chunk of your budget can be used for advertising and producing content that gives B2B businesses the best results, such as case studies, videos, and white papers. The 20% can be used to market to a whole new audience on TikTok. The last 10% can be used to try out designing something new, like an interactive AI avatar, or just set aside for emergencies.
Image from Content Marketing Institute
2. Swap from static to rolling forecasts for marketing budget allocation
Static budgets are easy to set up and useless in the field. That’s because so many factors change how you spend your money, even why you want to spend it in the first place. To accommodate those shifting real-world conditions, then, it’s so essential you switch from static to rolling forecasts when it comes to budget allocation.
There are a few key steps to switch to driver based planning and rolling forecasting effectively. Once you nail these, you can easily and quickly respond to changing trends and regulations and even jump on opportunities because your budget can flex as your marketing team demands.
3. Split purchasing workflows with individual spending cards
If everyone in your marketing department has to run up the chain of command just to get approval to use the budget, you are wasting time, and time is money. The best way to give your marketing team flexibility and take advantage of sales, deals, or opportunities at the drop of a hat is to issue individual spending cards to team leaders. You can then have one person monitor the spending to maintain oversight and deliver financial insights to key decision-makers in your marketing team and beyond.
4. Use sales intelligence software to keep track of customer acquisition cost (CAC)
Some costs are far more challenging to track, like customer acquisition costs. This is a critical metric to keep track of when managing a healthy marketing budget, but it’s not always easy to determine.
ZoomInfo, Lusha, and Apollo help with sales prospecting and lead nurturing. With a more budget-friendly option, you can put together rich, in-depth sales intelligence data that will help you lower the CAC and keep track of it.
5. Use a multi-touch attribution model to track sales
Using an attribution model as part of your budget monitoring approach lets you track how successful and profitable each marketing initiative is based on the unique touchpoint. This means you can individually track the effectiveness of your SEO, PPC, video marketing or social media marketing.
To do this, you’ll need to track key metrics with real-time reporting tools for finance, operations and beyond.
With such tracking tools, you should be able to note how many sales come in through each ad type (print, display advertising, social, referral, etc.) so you know which avenues need restructuring and which methods deserve a larger portion of the marketing budget.
6. Create ideal customer profiles and allocate budgets based on their CAC
Another effective strategy is creating ideal customer profiles, one of the go-to B2B sales strategies. Segmenting your customer base into smaller customer profiles can make it much easier to track spending success. If one customer profile brings in a lot of revenue, you can safely start allocating more of the budget to acquire that customer type over another.
Monitoring how effectively the budget is used to acquire specific customer profiles can help boost every aspect of your business. It can help you find your true target audience, understand the best messages for each customer profile, and adapt your marketing strategy accordingly.
Conclusion
Budget monitoring can help keep your marketing team on track and in the black. It can also help you uncover crucial insights about your customers, operations, and even your organization as a whole.
In the business world, money talks. Monitoring your budget with the top six strategies and understanding how your budget is being spent is how you can keep the conversation going.
Using tools such as Datarails FP&A software that integrates with any ERP will help you consolidate all of your data and track all of your KPIs including marketing budgets.
