How to Plan Your Marketing Budget for 2021
Plan your Marketing Budget in the smart way!
Frustration and furlough or feats and fortitude…
B2B marketers have had it rough in 2020—a pandemic, protests, and civil unrest, rising unemployment, a crazy stock market, supply chain problems, and whatnot.
Emerging off the back of a turbulent year for all, especially those in B2B businesses, marketing faces great uncertainty.
So eventually planning your B2B marketing budget for 2021 may be a good thing to do before the recovery gathers pace.
Now is the right time to think about 2021.
Try your best to showcase the breadth and depth of talents that all the best B2B marketers know their business needs.
To do so, make sure that your sales teams and key accounts have the budgets aligned and activities planned to keep that lead pipeline flowing freely.
We are sure you’re looking for answers to start your budgeting, such as the steps to take, the tools you need, and alternative areas of investment. Do not worry our article has you covered.
Considerations to make as you plan your marketing budget for 2021
#1 Fasten Your Planning Cycle
Let’s be frank here, it’s unlikely that a “set and forget” 2021 annual marketing plan will be successful as we continue to face uncertainty within the market.
Although planning is still critical, instead our attention needs to be on how to speed up your planning cycle. The quicker you analyze and adjust the implementation of your plan, the more you can successfully navigate impending changes.
But how do you do it?
It’s simple, create an annual plan. Go all in and create those high level targets for your marketing budget and outcomes, as well as your tactical plan.
You can also set up quarterly and monthly reviews. Determine now what metrics you need to analyze on a monthly and quarterly basis. Focus on leading indicators, for instance, a reduction in web traffic may be a leading indicator of a decrease in prospects. If your leading indicator is not meeting a goal, then you’ve the opportunity to adjust your tactical plan.
Speed up your time to market.
#2 It’s high time to focus on Return On Investment
An emphasis on understanding and driving tactical planning based on ROI has been a priority for CMOs for a while now.
It will now be more imperative than ever.
Line up items which are unproven when it comes to driving revenue and margin, are most likely to be cut.
But how do you hone In on ROI?
You should invest in analytics. To understand ROI you must invest in the tools to track outcomes. Tracking back to revenue can be complex, especially if you, like many B2B organizations, are facing a lot of disparate systems.
Create an efficient plan which will move you closer to that end outcome.
Drive your marketing team to value efficiency metrics. With the right analytics and planning sessions in place, you can drive your team to analyze and adjust tactics which will drive the highest return.
#3 Comprehend Your Priorities
Whether or not you’re optimistic about spending in the upcoming year, it’s vital to be prepared for adjustments to your marketing budget midyear.
2020 midyear budget adjustments forced many B2B marketers to prioritize short-term cash flow and what could be easily paused. So, in 2021, be prepared to adjust budgets based on impact.
But..how to understand your priorities?
Determine what makes certain activities more critical than others. ROI is definitely important here, but not the only lens. Other things to evaluate are how important that activity is for growth, creating part of your differentiation strategy or is it critical to reduce risk.
Evaluate and force rank. Creating a system to really understand which activities are most important to driving impact will set you up to adjust based on what is most important to you. You may decide this is a helpful exercise to review quarterly.
Create contingency budgets. These back-up budgets will help you understand exactly how you would adjust based on either increases or decreases to your budget.
In 2021, be prepared to adjust budgets based on impact.
#4 Invest in Your B2B Brand for the Long Term
Short-term budget cuts can often lead to reduction in brand visibility and communications, which are critical during an economic setback.
As you plan ahead, creating a plan which emphasizes maintaining saturation of communication from your brand will increase trust.
This will keep you on top of mind for clients and prospects as a critical resource.
This strategy will result in an increased share of voice that will help maintain strength now, and create an advantageous position during recovery.
How do you invest in your brand for the long run?
You should invest in organic. Increasing activities which contribute to organic brand mentions and placements, like influencer marketing or SEO, can help build your visibility across search and social media. You can then control your community and contribute to a footprint which can self sustain.
This is a great long term investment.
The 2020 State of B2B Influencer Marketing Research Report found that 90% of influencer marketing budgets are expected to increase in 2021.
Therefore, don’t slash your media spend. Organic and paid tactics work best when both of them run simultaneously. If you make significant edits to your paid investment, expect an impact to your B2B brand visibility.
#5 Try Revenue-based planning
The size of your business, your growth expectation, new product launches, and the markets you’re currently serving and new markets you’re entering.
All these things will impact your budget.
There are three areas of revenue generation – Customer Retention, Growth and Acquisition.
Customer Retention or keeping your clients that you worked so hard to acquire. So, plan for loyalty programs. Loyalty leaders in their industry grow revenues roughly 2.5x as fast as other B2B companies.
Customer Growth or expanding the product and services your clients buy. Cross sell offerings via multi channel programs are effective.
Customer Acquisition or growing market share by expanding your client base. This is the most resource intensive area of the budget. It costs to build awareness and it’s a longer process.
Tools to guide you through your future marketing budget
So how is a marketer supposed to develop a marketing budget for 2021?
These are the most effective tools to guide you through a 2021 marketing budget season.
Flexibility will be the keyword for B2B marketers in 2021. You might have to lurch from quarter to quarter next year as forecasting at the moment is prevalent with variables out of your control. Set up your budget reviews now and speed up what your typical cycle used to be.
Your measurement and ROI need to be more transparent as you head into 2021. Measure your cost per client, return on ad spend (ROAS), average order value (AOV) and any other factors important to the success of your B2B organization. These will be crucial in displaying your value and defense of your budget, including making the case for any increases.
There are many ways that B2B marketers plan for scenarios during product launches, trade shows, and other big events. And if you aren’t already scenario planning, 2021 will be the time to start. At the very least you should have growth scenarios drawn up to discuss with your CFO.
Wherever the business is projected to be, you need to ask: Will my marketing budget align normally with the forecast if I use a percentage of sales model or any other predictable model? Or will I make the case that I need more than usual all because of an explainable variable or investment?
Anyways, always remember that in downward trending scenarios, the CFO needs to understand what will be sacrificed and what will be the short and long term effects of that choice.
Alternative areas of investment
Brands that don’t have a Fortune 1000’s budget, can focus on activities that have a lower upfront investment but still provide a solid return for your budget.
This may include:
B2B brand building activities
These activities will likely continue to decline in favor of direct response tactics, now better known as performance marketing. How-so-ever, awareness, and brand investments shouldn’t ever disappear from your budget.
Activate marketing to existing clients
Allocate a higher percentage of your budget to market to existing clients for frequent purchases and higher order volume.
Market towards the end of the funnel marketing
You should try marketing towards the bottom of the funnel with more budget emphasis on search and digital retargeting activities. This will create earned media opportunities. Thus, focus on establishing a consistent program of earned media opportunities to easily reach new audiences.
Strategize your content effectively
Gather budget and develop a strategy around client building (email, CRM, social) and content development (blogs, whitepapers, video, podcasts, etc.) to assist in audience building.
Partner within your B2B organization
Here are some pro tips we’ve compiled from other smart marketers on how they are showing value with closer internal partnerships.
Begin with reallocating forgotten budgets
Go hunting for other line items that are sidelined. Trade shows, travel and entertainment, those corporate season tickets, etc. that were sidelined in 2020 and likely in 2021.
Team up with your Sales Dept
Right now, they need you as their right hand the most – lead generation, sales support, virtual offerings, and more.
Focus on your HR marketing
If your brand is hiring, the HR needs you. The recruiting game has actually changed because of COVID-19 and most B2B brands are woefully behind on developing and marketing a modern employer brand.
Get a buy-in from the C-Suite
Your B2B brand’s digital transformation efforts need you & this means B2B sponsorship (and budget) from higher ups.
Just PLAN to PLAN
The roller coaster will continue for most B2B marketers, but the fundamentals of marketing will always be there.
Reach out to your clients wherever they are and show value for the activity you provide the organization.
There’s likely to be a lot more planning and budget reviews ahead in 2021, but you’re a pro—and you got this.
Our B2B Sales & Marketing Consultancy firm can help you make the planning process easier with content tailored specifically for marketers so that you come out of the other side of the pandemic unscathed.
Happy Marketing to you!