Marketing budgets — How much is enough?

The marketers I work with spend enormous amounts of time and energy outlining business goals, assessing market opportunities and developing comprehensive strategic plans to win customers and increase market share. And at the end of this exhaustive journey, the final step requires them to belly up to the boardroom table to request the resources required to ensure success. But how much should they ask for? How much is enough to make an impact? How much is a good investment?

Percent of sales is a common place to start. Many companies establish budgets in the range of 2% to 10% for marketing activity. But one size does not fit all. Therefore, it’s important to assess your situation and consider a number of factors to help you determine the right budget.

Ask yourself the following questions:

• What is the age of your business or stage of your brand in the product lifecycle?
• Are your products/services easily attainable or do they flow through complex channels?
• Is your customer transaction B2B or B2C?
• How innovative or complicated is your offering? Is it easily communicated or will you need to invest resources educating your customer?
• What is your competitive situation? How much noise is your competition making in the marketplace?
• What other special factors do you need to consider?

The answers to these and other questions can help you better pinpoint how much is enough. Ongoing measurement will help you hone your marketing investment over time. And the work doesn’t end once you’ve allocated the dollars. The most critical part of any investment is tracking its performance, reevaluating objectives and making adjustments as needed. Only then will you know if the investment is enough to move the needle.