Building a Solid Budget is a Fairly Straightforward Process

The “Infinity Izzies” come from very expensive paid search ads. If so, here’s what ACME’s actual acquisition costs might look like: acme-buyer-accurate-personas-cac Now, your marketing channels might not be that simple, but with a little effort, you should be able to tie your marketing dollars to the buyer persona sales they produce. Advertising Continue reading below As you evaluate each marketing channel, don’t be surprised if you discover great opportunities for your business. Some channels seem to generate a lot of value, but when you look at the revenue they produce, they are a waste of money. On the other hand, sometimes a channel may look like a loss on the surface, but when you dig into your data, you uncover a gold mine! Phase.

Divide your revenue goal for each buyer persona by the revenue per sale for that buyer persona.

Establish your budget Alright, we Luxembourg Phone Number did it! Now that we have the information we need to calculate your marketing budget, all we have to do is run the numbers. Since it’s a bit of a pain to do by hand, I’ve created a free calculator on my site to help you out. But, if you like to do it the hard way, I’ll show you how to do that too. Step 1 Multiply your revenue goal by the percentage of your revenue you want to generate for each buyer persona. For example, if ACME’s revenue goal was $2,425,500, here’s how they might break down their buyers’ contributions: Advertising Continue reading below “Classic Cindy”: 6% ($157,500) “Pro Paul”: 27% ($648,000) “Infinity Izzie”: 67% ($1,590,000) 2nd step Divide your revenue goal for each buyer persona by the revenue per sale for that buyer persona.

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What do you think of this approach? How to build an effective marketing budget?

Advertising Continue reading below Not too bad, right? Well, it’s true…as long as you get it right the first time. However, if you want to play around and try out different scenarios, lifetime values, customer ratios, target earnings, etc., having a calculator really comes in handy. Conclusion Unfortunately (despite what some CEOs seem to believe), you can’t pick a marketing budget out of a hat. But, as stressful as creating a well-crafted marketing budget for 2017 can be, it’s still one of the most important marketing activities you can do. Luckily, if you know your revenue goals and the lifetime value and acquisition cost of your buyer personas, building a solid budget is a fairly straightforward process. What do you think of this approach? How to build an effective marketing budget?

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