When you’re building your marketing budget for the first time, it can seem like a daunting task. There are many questions to answer, like “how much money should I spend on marketing?”, “what initiatives are best to implement?”, and “how do I appropriately allocate funds within each marketing category?” A lot is riding on questions like these, so it’s easy to feel overwhelmed.
There is no hard-and-fast rule for creating the perfect marketing budget. This is because every company is different (size, industry, maturity, audience, etc.), but there are a few general questions that you can answer about your company to make sure you have an effective marketing budget.
How much Annual Recurring Revenue (ARR) does your B2B SaaS company currently collect?
ARR gives you a baseline for the funds that you’ll be able to allocate to marketing yearly. This knowledge allows you to begin to plan the size and scope of your marketing efforts. It will also give you an idea of the revenue stream you are going to have to support.
What are your company’s marketing goals?
This seems like a simple question but you’d be surprised how many marketing departments are pursuing initiatives that are designed for the wrong purpose, just because a marketing team of 3 is trying to do the job of a marketing team of 20. Figure out specific goals for your company and build your marketing initiatives around them. A great way to accomplish this is to commit your marketing team to use Objective Key Results (OKRs). This goal-setting framework will force your team to work on what matters and will also help them to prioritize the most impactful projects over many of the seemingly pressing but ultimately underwhelming requests that will come their way (learn more about OKRs in this great blog post: “4 Marketing OKRs for a B2B SaaS Company” ).
Knowing your company’s goals will have a real impact on how you decide to spend your budget within your marketing department. For instance, a company with the goal of scaling will have a much different marketing department than one that is aiming for profitability.
When did you first start receiving subscription revenue?
The marketing tactics of an established company are drastically different from a startup that is trying to break into the market. Having a good understanding of where you are in the market is key to deciding what marketing initiatives you should be budgeting for. As you can see in our blog article, “4 Lifecycle Stages Of The SaaS CMO Service,” if you’ve just achieved Product Market Fit, your marketing budgetary needs will be very different than if you are trying to scale and grab market share.
Creating your first marketing budget
Once you have the answers to these questions, you’ll be able to create an effective marketing budget. However, if you still need some more information before you get going, be sure to check out this blog post on “How To Create Your First SaaS Marketing Budget” for more advice on how to make the most of your marketing dollars.
If you’re ready to go, then fill out the form below to download this free B2B SaaS Marketing Budget Template to help you hit the ground running! This document will help you:
Decide how much to spend on marketing
Forecast your budget in an easy-to-read, detailed manner
Effectively track your spend to make sure you stay in budget and can forecast more effectively in the future.