In comparison, 80% of CEOs and around 60% of marketers factor conversion rates into their marketing budget calculations. And, as you can probably imagine, all of these improper priorities make it incredibly difficult to budget effectively: Does Your Online Marketing Budget Really Make Sense [INFOGRAPHIC] | Disruptive advertising The good news is that if you remember that the goal of your marketing budget is to create revenue and not clicks, conversions, or any other marketing metrics, creating a marketing budget is pretty straightforward. Advertising Continue reading below So figure out what your marketing revenue goal is, write it down somewhere, and let's move on to phase two. Phase 2. Define your target audience Unfortunately, while 72% of marketers are familiar with the idea of buyer personas, only 30% use them effectively.
That in itself is a problem for fax list marketers, but things get even more complicated when you're trying to create a marketing budget for an audience you don't understand. For example, suppose you market ACME widgets, the world's largest widget maker. You know your average customer has a lifetime value (LTV) of around $24,000 (widgets are a profitable business, after all…). With that in mind, you might look at a marketing channel where each sale costs $50,000 and think, that's a waste of money! I am not putting any budget in this channel next year. On the surface, this seems like a very reasonable move, but let's throw ACME's buyer personas into the mix. In fact, ACME has three very different buyer personas: Using Buyer Personas to Build Your Marketing Budget for 2017 And guess what? Remember that unprofitable marketing channel you were about to shut down? It turns out to be your best source for “Infinity Izzie” sales.
All of a sudden, this marketing channel doesn't seem so unprofitable, does it? If you don't understand your target audience and what your buyer personas are worth, it becomes very difficult to decide which marketing channels will help you achieve your business goals. So if you don't have buyer personas, don't know the lifetime value of your personas, or don't know what percentage of your sales come from each persona, now is the time to do it. discover! Phase 3. and what they are worth, you need to figure out how much it costs to attract a new customer from each persona. The easiest way to do this is to simply take your total marketing spend and divide it by the number of sales generated by each persona.