As a business owner or CEO, you know that the changing seasons bring not only cooler breezes and football games but also the crucial task of setting your annual marketing budget. Over my many years of participating in the budgeting process, I’ve seen some great ways to approach it, and plenty of opportunities for refinement.  

Do you ever roll over the budget from last year with a slight increase to account for inflation? How about budgets with one big bucket for advertising and promotions that includes everything from print advertising to digital to billboard signs to client gifts? This makes it challenging to identify what’s working well and what’s not. 

Budgets may feel like a burden, but when well-crafted, they become an asset that aligns with your strategic marketing plan.  

Strategic Budget Planning: Key Metrics and Considerations 

It’s fundamentally impossible to have an accurate and meaningful budget without a plan that aligns with strategic growth priorities. So, before moving into budget season, here are some areas to assess and key questions you’ll want to consider: 

1. Establish Key Metrics 

• What are your growth goals for next year (percentage and dollars)? 

• Is this amount more or less than in prior years? (Note that if it’s more, your budget will likely need to be bigger! Companies often expect exponentially more growth with the same budget.) 

• What is your average sale/contract value? 

• If your products and services vary significantly in value, this will need to be broken out. 

• How many more products and services must you sell to hit the growth goals? (This can be calculated based on the above.) 

• What was the budget this year, and how much has been used through Q3? 

• By the end of Q3, how much did it cost to bring in a lead, MQL (marketing qualified lead), SQL (sales qualified lead), and new customer? I suggest doing this calculation fully loaded with salaries and benefits. 

• If you divide your forecasted revenue by the average contract value, you know how many units need to be sold next year. You can then take the cost per customer through Q3 and multiply it by the number of units that need to be sold to determine the budget needed to drive growth. 

Stop here. 

Are you willing to invest this much? If not, revise your forecast. Many times, we see unrealistic growth projections given to marketing and sales, leaving the “revenue team” feeling behind and like failures all year when they are likely doing great. Use your budget to help determine growth. Overriding the data is never a good scenario. 

2. Set Strategic Priorities 

Setting strategic priorities before establishing a marketing budget is essential as it ensures that resources are allocated efficiently and aligned with your broader business goals.

• What are the company’s growth segments for next year? 

• Are these existing segments needing further penetration (will require less budget)? 

• Are they new segments requiring brand building (will require more budget)? Building name recognition and trust takes time and dollars. 

• How are certain products and services expected to grow? 

• Will you introduce cross-selling and bundling? 

• Will you be adjusting pricing in any way? How will that impact demand? 

• Are there any new products or services being launched? (Note, launches take more time and dollars, and the ROI may take time.) 

• Given the strategic priorities, what requests should your marketing team accept? Which ones should they decline with C-level support? 

3. Perform a Talent Check-Up 

No one or two marketers can do what’s required to power up a program capable of driving significant measurable growth. You’ll need specialized talent.

Asses your answers to the questions below to determine if these roles are being filled by someone on your team. If they are not filled, you may want to consider adding fractional support with the roles indicated.

• Do you have a strategic marketing plan for the new year? (May need a Fractional CMO) 

• Do you have pipeline metrics that will help drive budget decisions? (Fractional CMO) 

• Do you understand the level at which you need to invest to drive growth? (Fractional CMO) 

• Is your brand, brand strategy, and collateral aligned with the future direction of your company? (Fractional CMO + Creative Director) 

• Does your website make an impactful first impression? (Fractional CMO + Digital Marketing Specialist + Developer) 

• Does your website drive the leads necessary to fulfill your projected growth goals? (Demand Generation Specialist) 

• How well has your trade show strategy produced ROI? Should you continue to invest? (Marketing Manager + CRM Manager) 

• Is your organic search traffic increasing? (Digital Marketing Manager + SEO Specialist) 

• Are you leveraging Generative AI to streamline various marketing use cases? (Fractional CMO) 

• Do you get regular reporting on the metrics that matter most, along with actionable takeaways? (Fractional CMO + Marketing Analyst) 

• Is your content targeted, memorable, and highly relevant for a specific segment and buyer? (Content Marketing Director) 

• Are you mixing the type of content delivered for different ages of the target segment and stages in the buying funnel? (Content Marketing Director + Multi-media Specialist) 

• Does your entire company engage in social media the right way to drive measurable results to the marketing funnel? (Fractional CMO + Social Media Manager) 

• Are you effectively nurturing leads to MQLs and SQLs through email marketing and retargeting? (Paid Media Specialist + Digital Marketing Manager + Content Marketing Manager) 

• Are you investing in paid media, and what is the ROI on that specific investment? (Paid Media Specialist) 

• How many virtual events have you done, and what has been the attendance? Do the attendees convert to MQLs? (Marketing Manager + Fractional CMO) 

• Is the sales team and overall company aware of marketing’s efforts and how to access and leverage marketing assets? (Marketing Manager + Internal Communications Director) 

• Do initiatives move along on budget and on time? (Marketing Operations Manager) 

Budgeting can be easy, but when it is, it’s typically ineffective in driving planned growth. Use the right metrics to understand what your budget needs to be to drive growth. With that number in mind, identify the key strategies and talent necessary to execute.  

It’s challenging for well-funded early-stage companies and established small and midsized businesses to have all the talent needed as W-2 employees. The US Bureau of Labor Statistics (BLS) reports that the mean annual wage for marketing managers is $158,280. It’s a lot to pay for a role with a limited ability to do all the things needed as shown above. 

How Fractional Marketing Can Provide the Talent Your Business Needs 

Fractional marketing is becoming the preferred method of staffing marketing departments for companies below the Fortune 1000. These marketing service providers, such as Marketri, can provide all the skillsets needed to power a modern, high-growth marketing program for the investment of one to two FTEs using proven best practices that save time and improve quality. Fractional marketing companies provide one point of contact and one point of accountability for results. Most, like Marketri, integrate seamlessly into their clients as if they are in-house employees. 

If your current budgeting process isn’t delivering the results you need, consider embracing a new approach. Start the new year with a strategic plan and budget that will drive your company’s growth. Explore how fractional marketing can be the game-changer you need.