Years ago, a national ministry had a robust fundraising program but lacked marketing efforts beyond direct fundraising. They were notably weak in public relations, online communications, community engagement, and other promotional activities.
To address this, a Marketing Director was hired to design and build out these initiatives. Leadership approved the concept but was initially uncomfortable with the term “marketing.” It was essential to help them understand that marketing encompasses all advertising, public relations, promotion, fundraising, and communication efforts. It is a broad term that includes all efforts to reach and engage a growing audience, donor base, or customer base.
The first step in developing a marketing budget is to ensure a strong brand and aligned messaging. A clear and connected brand can propel an organization forward, while a weak or disconnected brand can hold it back. Investing time and budget to make the brand memorable and compelling, with fully aligned messaging, is crucial.
Effective marketing is key to growing an organization. However, marketing budgets are often the first to be cut during tough times, which is counterproductive. Increasing the marketing budget, if managed correctly, will boost engagement and improve the bottom line.
Determining Marketing Spend
The US Small Business Administration recommends businesses spend 7–8% of gross revenue on marketing. Many marketing consultants suggest 2–5% for B2B businesses and 5–10% for B2C businesses, with aggressively growing businesses often spending 20% or more. The most recent CMO Survey indicates that companies, on average, spend 11–12% of their budgets on marketing.
These benchmarks are a starting point, but several factors can impact the size of the marketing budget. The process can be broken down into three simple steps:
1. Establish Clear and Specific Marketing Goals
Goals should be measurable and specific. Nonprofits may focus on the number of donors or total contributions, while businesses may track new customers or total sales. Churches and ministries might track visitors or new members.
2. Set a Fixed Monthly Budget Number
Allow for seasonal adjustments or special events. A good starting point is 7–12% of gross revenue. The actual amount can be influenced by factors such as longevity, marketing scope, competition, and visibility.
3. Allocate the Budget to Various Initiatives
The marketing budget should include items that create engagement with prospects, donors, or customers, such as:
– Website design, SEO, and maintenance
– Social media posting and advertising
– Online advertising (keyword and banner ads)
– Traditional media (radio, television, print)
– Email and direct mail campaigns
– Public relations and crisis management
– Video production for various media
Once the brand is strong, the budget is determined, and funds are allocated, the marketing budget needs to be managed and optimized. Well-invested marketing budgets produce results, while poorly invested ones can lead to lost revenue.
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Article courtesy of Infinity Concepts