How to determine your marketing budget

“How do I determine my marketing budget?”

I was recently asked this very question by the founder of a non-profit organization. It’s their first year and they are looking for a standard formula for composing a budget. Is there a percent of the total budget that should be dedicated to marketing and communications?

My answer applies not only to start-ups, but to any non-profit planning for the next budget cycle. And, unfortunately for those looking to put a number on paper within the hour, it’s not a 5% increase in last year’s figure, nor is it a percentage of the overall operating budget. It’s more involved than that. But, it’s more purposeful than that, too.

It’s all about your goals.

What are the strategic goals of the organization? From those, have you determined your communications goals and objectives? In it’s simplest form, do you know WHO you want to reach, for WHAT purpose and HOW?

Instead of looking for a formula online, the next time you’re determining your marketing budget, follow these straight-forward steps (that serve to clarify way more than your budget, by the way).

What are we trying to accomplish? 

These are your goals and objectives. Are you looking to provide education? Recruit members? Raise funds? Grow your footprint from local to regional?…

What are the problems you are trying to solve, and which of those are priorities for this budget cycle?

This should be heavily influenced by your strategic plan.

Who do we need to help us accomplish our goals?

Your audience. It may include existing and new stakeholders. Is there a particular professional group you need to reach? Lawmakers? Single moms? Individuals diagnosed with a specific medical condition?…

Some audience groups are easier (and less expensive) to reach than others. You may have access to some of these groups by nature of what you do. For example, if you are a teachers union, you have a much easier path to reach educators than a healthcare nonprofit looking to promote activities within the classroom.

How do we reach our audience?

Vehicles are more abundant than ever today. Social media, emails, one-on-one meetings, conference presentations, special events, church services…a blimp. With a little creativity, communications channels are endless.

Your outreach will depend on your audience. How do you best reach that particular group? Which specific channel might you use. Advertising to doctors on Facebook is notoriously difficult. Advertising on LinkedIn may be your better bet, though more costly. You may recruit foster parents by activating a group of volunteer speakers to plaster the local church service scene, or are you more likely to succeed with a direct mail campaign?

When you determine the optimal mix of communications channels, you’re able to estimate costs to see what actually is and is not affordable.

Now, instead of a formula based on a percentage of an overall budget or comparison to last cycle’s spending, you’re armed with a strategic proposal of how much it will cost not to complete various activities, but to achieve specific outcomes.

This budget is adaptable in a strategic way. You can decide to limit your outreach efforts to a select audience group and reallocate resources accordingly. You can spend and cut with purpose.

“How do I determine my marketing budget?” In short, you plan.




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