CEO Decides On $100,000 Marketing Budget Allocation
A CEO must decide where to allocate an extra $100,000 in marketing budget, considering options such as paid search and conversion rate optimization. The decision process involves mapping the sales funnel and pricing each option against the constraint.
Original reporting · searchenginejournal.com
Original: “How I Decide Where The Next $100,000 Of Marketing Budget Should Go”
Read “How I Decide Where The Next $100,000 Of Marketing Budget Should Go” at Search Engine Journal →
How this was written. Awesome B2B wrote this article with a language model from Search Engine Journal’s reporting (model: @cf/meta/llama-3.3-70b-instruct-fp8-fast); it describes that reporting rather than adding to it. The original, linked above, is the full story.
Key points from Search Engine Journal’s report
- CEOs must carefully consider where to allocate extra marketing budget to maximize growth.
- Mapping the entire sales funnel, including after the sale, is crucial to identifying bottlenecks and determining the best allocation of budget.
- Pricing each option against the constraint and estimating potential return on investment helps to determine the best approach.
- Research and validation are essential to ensuring that the budget is allocated effectively.
- The budget should be staged, with some funds allocated immediately and others held in reserve to be released later.
CEOs often face the challenge of deciding where to allocate extra marketing budget, according to Search Engine Journal. After a good quarter, the question of where to put an additional $100,000 arises, with the answer often being more of what worked previously, such as paid search.
However, this approach may not always be the best, as it can lead to funding the part of the business that is already working, while neglecting the area that is holding growth back. To make a more informed decision, a process is undertaken to evaluate the options and determine the best allocation of the budget.
The process begins with mapping the entire sales funnel, including after the sale, using data from the last 90 days. This involves identifying the conversion rates at each stage, from site visits to closed-won deals, and determining where the bottlenecks are. For a hypothetical company called Fieldline, the data shows a low win rate and high customer churn, which are not reflected on the marketing dashboard.
The next step is to price each option against the constraint, estimating the potential impact of each option on the business. This includes calculating the potential return on investment for each option, such as paid search, conversion rate optimization, and retention. The options are then compared to determine which one has the best potential return.
For Fieldline, the options include increasing paid search, improving conversion rate optimization, and addressing retention and lifecycle marketing. The calculations show that conversion rate optimization and retention have the potential for higher returns than paid search. The decision is then made to allocate the budget accordingly, with a focus on addressing the constraints that are holding back growth.
Before allocating the full budget, $10,000 is spent on research to validate the assumptions and determine the best approach. This includes customer interviews, sales call reviews, and analysis of AI search metrics. The research provides valuable insights, such as the importance of onboarding and AI search visibility, which inform the final allocation of the budget.
The final allocation of the $100,000 budget is then determined, with a focus on addressing the constraints that are holding back growth. The budget is staged, with some funds allocated immediately and others held in reserve to be released later. The allocation includes funding for customer research, onboarding and lifecycle marketing, AI search visibility, and demo flow conversion rate optimization.
Questions and answers
What is the first step in deciding where to allocate the extra $100,000 in marketing budget?
The first step is to map the entire sales funnel, including after the sale, using data from the last 90 days.
How is the potential return on investment for each option calculated?
The potential return on investment for each option is calculated by estimating the potential impact of each option on the business, such as the number of new deals or revenue generated.
Why is research and validation important before allocating the full budget?
Research and validation are important to ensure that the budget is allocated effectively and that the assumptions made about each option are correct.
