Is marketing the strategic leader in your business? While answers will vary – approximately 40% of companies have marketing at the helm of their business strategy. Why? Well, marketing is a very important piece of a company’s overall business development plans. In its simplest form, the goal is to generate interest in your product and/or services and impact top line revenue growth. Marketing is vital to new companies as well as established brands – and all too often misunderstood. It can potentially:

• Drive increased sales volume to compensate for lower priced products
• Upsell/Cross-sell customers to higher margin products
• Communicate product or services ‘intangible’ value and benefits to customers
• Convert online traffic to sales leads and much more

Marketing has evolved over time with the convergence of new media. While there are a myriad of choices – strategic and integrated marketing will help you focus your efforts on the most fruitful ‘profit producing’ tactics and ensure a company can reach, communicate and satisfy/retain its targeted buyer. Once you have developed a strategic marketing plan and identified the appropriate tactics in market – it is really important to set and stick with a manageable budget.

Budget setting is dependent on many variables so generally one-size fits all approaches don’t apply. A marketing budget should be treated as an investment with long-term implications. While there are several acceptable methods for budget setting, the general approaches include:

• Revenue Percentage. Small businesses usually allocate 5-10% percent of their revenue. However, as you grow and can afford it, allocating 15-20% is not uncommon. Research indicates that young companies (under 10 years old) tend to spend more than average. Brand-new start-ups should use total cash in the bank as the baseline to set marketing budgets, rather than revenue.
• Net Sales. This is similar to Revenue Percentage budgeting, but you are deducting returns, discounts, and allowances.
• Competitive. With the help of an independent marketing consultant or agency, determine competitors marketing budget allocation. With these considerations, you can in turn assess revised revenue forecasts based on your ramped up marketing efforts.

Of the above budgeting methods, the best scenario is dependent on variable factors such as your growth stage [launch, growth, or maturity], the competitive environment, revenue projections, etc. Once your budget is set, now it’s time to manage the day-to-day aspects of your marketing budget in real time. For small to mid-sized companies – finding the most efficient and effective tools to do so can be painstaking. Managing your budget proactively will not only increase your ROI [return on investment] but it will hold your company to a level of accountability for each engagement in market. Many new companies miss vital opportunities to grow their business and market share by ill-planned marketing efforts.

One online tool that may prove to make your budgeting life more pleasurable is Allocadia. This online budgetary management tool is refreshingly unique and designed to replace inefficient and cumbersome spreadsheet-based marketing budgeting processes. Allocadia has several useful functions including, but not limited to, streamlined reporting including ROI analysis, user friendly graphical charts, and a multi-user interfaced that can be accessed on the web. Try it out for free and let us know what you think in the comments section below.