Ultimately, the main concern for justifying a marketing budget is the Return on Investment (ROI). The first thing to look at is the marketing budget. The recommended standard marketing budget for small to mid-sized businesses should be around 4% of the revenue coming in, but we typically find that most companies spend far below that, making it very difficult to measure ROI if there isn’t a marketing budget that is comparable to the revenue.
The second way to assess marketing effectiveness is by reviewing the SMART objectives:
•Specific
•Measurable
•Actionable
•Realistic
•Time-Bound
Before starting any new marketing campaign, clearly define all SMART objectives and Key Performance Indicators (KPI). Comparing the results at the end of the campaign to help determine if the efforts were justified.
Thirdly, analyzing lead conversion — which is the process of converting a lead into an account, contact, and/or opportunity. But remember, marketing’s ultimate goal is to use various tactics to create touch points with the target audience to build trust and loyalty. Unless you are solely utilizing online strategies such as AdWords, SEO, Pay Per Clicks (PPC), etc., it may be hard to completely quantify your marketing efforts because in marketing you are using various platforms and strategies to increase visibility and credibility which leads to profitability.
In summary, if you’re wondering how to assess whether your marketing efforts are justified, remember these three points — work on getting your marketing budget to be around 4% of the revenue, use SMART objectives, clearly define both SMART objectives and KPI before beginning a new marketing campaign.