How to determine marketing budget for B2B

I’m often asked how much money to budget for B2B marketing – usually towards the end of the year when annual budgets are being developed. Most people already have a ballpark number in mind. They also have a much higher number in mind where the subject becomes uncomfortable. And they wonder what other people with companies of a similar size are budgeting – isn’t there a basic starting point? 

The traditional starting point for a budget is two percent of annual sales. So, if you’re a startup with zero sales, your marketing budget is…zero. You don’t get to do any marketing? And if you’re a thriving multinational with $1 billion in sales then is it really necessary to pour $20,000,000.00 into marketing this year? Or maybe that’s not enough. Does a mid-size company struggling to keep up with orders need to keep pouring on the marketing or would an investment in machinery or staff make sense? How about a company on the cusp of a major growth spurt with an opportunity to open new markets and dominate long-time competitors? If this company budgets using two percent of the much smaller numbers from the prior year, it’s likely to leave the sales team coming up short of the new, much larger sales goals and failing to take advantage of the growth opportunity.

As a starting point or rule of thumb, it seems budgeting two percent of sales doesn’t really work for many companies at all.

That’s why I recommend focusing first on goals. What are you trying to accomplish? Launch new products or services? Develop new markets where you’re an unknown? Take market share from bigger competitors? Expand internationally? Dominate the Internet? Once the goals are established, a marketing plan can be developed specifically to achieve these goals. This plan may involve:

  • high profile advertising campaign or a modest ad campaign to own a particular niche
  • highly visible yet stealthy public relations program
  • fresh Web site with e-commerce and social media presence
  • exhibiting at key trade shows, and presenting a short course
  • hosting a podcast and/or guesting on other podcasts
  • sales presentation materials and literature
  • ramping up email marketing and direct response campaigns

– and much more – all integrated and coordinated to move the company forward in the same direction.

That sounds great! So, what would it cost to implement this marketing plan? That is the ideal budget number. That is also when people silently ask themselves if they’re truly serious about achieving their sales goals and seeing the business strategy succeed. And it’s also when I figure out how to do it for half the cost.

For guidance on figuring out your ideal budget, call 908.479.4231 or email

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Paul Entin’s Marketing In Real Life explores every facet of marketing from advertising, PR and lead generation to content marketing, direct response and the latest in marketing automation – and more. Paul Entin’s Marketing In Real Life provides real-life insight into the relationship among sales, marketing, and customer service – and the customer – plus quick commentary from epr founder, Paul Entin.