To come up with a marketing budget, you need to know how much it costs for you to generate business. This is one of the beautiful things about digital marketing as opposed to traditional marketing: you can look at what you’ve spent and then use the various metrics available to see what kind of a return your marketing has generated. Essentially you need to know the steps in your sales funnel, as well as the specific numbers involved. If you look at your entire sales funnel from an initial visit to your website from a Google Ad, right through to a sale being closed, what are the steps that your customer has taken on that journey? How much has that cost, how much has it generated in revenue, and how many times has this happened (i.e. how many customers have you successfully taken through this process)? You can then work out the cost of each qualified lead.
Other questions to consider are: how many of your customers come back for more purchases – and how often? What percentage of your sales are new customers and what percentage? What opportunities are there for upselling? There is a lot to think about, but it’s a great opportunity to dissect your business and get a really deep understanding of how you generate revenue through marketing.
You can’t just pull a digital marketing budget out of thin air. It really pays to get down into the data and get really clear about these costs and the returns they bring. Before watching the upcoming videos in the series, please go and take a look at your sales funnels and get to grips with those numbers. You’ll probably be amazed at what you find.
