I chose a marketing career because I was told thereâ€™d be no math. My guidance counselor was wrong – you must do the math.
Letâ€™s start with 82%.
If you set up a local account in Google for your website (check out Google Local), they flash 82% at you during the process. According to Google, 82% of all searches for anything start with an internet search. Thatâ€™s the first thing anyone does today when they go to look for a solution to a problem.
So if you are trying to generate leads for your business, I think itâ€™s safe to say that a portion of your sales and marketing budget should be invested in your online strategy. But how much?
Sirius Decisions, a company that provides sales and marketing research and advisory services provided me with the following stats:
B2B service companies under 15M in annual revenue invest 16-21% annually on their sales and marketing budget
B2B software companies under 15M in annual revenue invest 27-32% annually on their sales and marketing budget
Now ask yourself:
How much are you spending?
What portion of that is cost of sale and/or sales salaries?
What portion of that is marketing and marketing activities?
What portion of your marketing budget is for online tactics including your website?
Now do the math on 25%.
Letâ€™s say a $5M software company sets aside an annual budget of $1.25M (25%) for sales and marketing:
$300K for a sales rep and a sales manager
$100K for a portion of the implementation that is required in the sales process
$200K for account management and staff to support recurring revenue sales
$75K for a marketing manager or admin support for sales support
$100K to attend trade shows and pay for travel
$50K for materials and trinkets
$25K for client relationship management
$10K for CRM and/or other sales and marketing support tools
Already I am at more than 65% ($860K) of my budget before I have even addressed my online strategy. Are you willing to ignore potentially 82% of your market by not investing in an online strategy? If you spent 25% of your sales and marketing budget on online tactics, a $5M company should be spending about $300K on their website, social media, optimized press releases, content development, search engine optimization, conversion tactics, etc.
If you find 82% a stretch or worse yet, are one of those CEOs that say, “but my customers don’t shop online.” What you are forgetting is that people “look” online. Are you prepared to not have them looking at you? Even if you cut 82% in half, itâ€™s still a bet most companies should make.
Spending 25% of your annual sales and marketing budget to reach 82% of the eyeballs in the world seems like a no brainer, even for this math challenged Toronto marketing consultant.