Hubtec Digital

What is ideal marketing budget for B2B industries?

Marketing for a business has always been a vital asset when it comes to making revenue. Companies can get name recognition, maintain long-term relationships with their audience, and it is essentially an ongoing strategy to help businesses flourish. Customer engagement is one of the most critical factors for a successful business. 

The Budget

Now, how much should a business set for its marketing budget? 

 

There are two standard options: 

  • A fixed percentage of the annual revenue
  • A set amount of money that can be added to or taken from 

The first option is prevalent. Companies usually set from around 7%-13% of their annual revenue on marketing. So, if a company made $1,000,000 in 2021, then their marketing budget for 2022 would be $70,000 – $130,000. From there, that budget would be spent on different marketing campaigns throughout the year. 

Some companies also see another approach with the first option. For example, the company is looking to grow to $2,000,000 in revenue in the next year. They would take 7%-13% of the target revenue and therefore spend $140,000 – $260,000.

Now, the second option is also quite common. Companies pick a number and see if it covers the cost of marketing for the year. If it doesn’t work, they cut some of the other expenses or add more to the marketing budget.

The reverse could work as well, where you add everything you hope to do and propose the final amount as your marketing budget. 

The second option allows for more creativity with the budget.



Where does this lead me?

There aren’t any scientific methods involved with these options, but why not give them a try? 

In either case, make sure that you prioritize the list based on the likelihood of generating a positive ROI. You want precise targeting, using the best cost, with the highest possibility of results.

Generally, this means that digital marketing would perform better than traditional offline marketing.

When considering your marketing projects, any project that returns your investment is sound. If you put $200 in an SEO project with a marketing agency and get back $400, you should be happy.

Keep in mind: your goal should always be to spend as little as possible to make as much as possible. When spending money on ad revenue, the goal should be to aim for 300% in return for your payment. If you spent $100 on online advertising, you should hope to get $300 in return. 

In Conclusion

Is this a successful marketing strategy for everyone? Will this work for me? Unfortunately, there are too many variables to answer this question accurately. Consider the following points:  

  • Quality of brand
  • Quality of service
  • The economy
  • The competition
  • Timing of marketing strategy

But you have to start somewhere. Experiment with your marketing strategy, and see which methods work best. You’ll see what works as you continue to gather more data. Setting up a goal and budget is a good start. 

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