What The 3 Most Important Numbers For Your Marketing Budget?

1. Costs –

Donald Trump is right. Wealth isn’t accrued by how much you make, it’s accrued by how much you can save.  This is no different with your marketing budget. Marketers spend tons of money on things – media buys, advertising, staff, creative pieces, consulting, special events and more.   No wonder them and accounting hate each other!  Good marketers don’t necessarily need to reduce their costs, but they need to make sure whatever they spend money on can be attributed to increased sales.   Any marketing tasks that can’t be attributed to sales should be looked at closer.  Remember, marketing’s job is to bring in opportunities for sales. Therefore, each expense needs to be scrutinized for how well it’s bringing in sales opportunities.

2. Marketing Originated Customer % –

Not all new business comes from marketing.  Some are referrals, up sells to existing customers or other existing channels. If you want to see how well your marketing is doing at bringing new people in the door then you need to pay attention to the Marketing-Originated Customer percentage.  Divide new customers from leads by total new customers and multiply by 100.

For example:

Total new customers in a month = 25

Total new customers that started as a marketing lead = 10

Marketing Originated Customer % = (10/25) X 100 = 40%

3. Customer Acquisition Costs –

Some marketers, particularly those in tech, argue that this is the most important marketing budget number. Your customer acquisition cost is the amount your marketing department spends each month divided by the number of customers it receives each month.  Managers often debate what marketing expenses to include in the overall ‘marketing costs’ total, but we include all expenses.  After all, the marketing department only exists to win new business and acquire new customers.  Every one of their tasks – charitable donations, marketing campaigns, luncheons, paid-search ads etc are all used to generate awareness and new customers for your business’ product or services.