Planning Your 2021 Budget
One of the foundational elements of a marketing plan is your marketing budget. You already know how to budget your business — you’ve done it every year and have plenty of experience. But all of that planning seemed to go straight out the window in 2020. None of us were prepared or saw this coming!
With 2020 nearing a close, it’s time to start thinking about your budget for 2021. But we know what you’re thinking: after having such an unpredictable year, how do I plan my marketing budget for next year’s uncertainty?
Our answer is this: Be prepared to plan for the unplannable by giving your business flexibility with where you’re spending your dollars.
How to prepare your marketing budget
It’s important to note that marketing is an investment that is crucial to your business success every year, including 2021. By creating a breakdown of your budget, you’ll be able to get the most out of your investment and better allocate your marketing dollars.
Start with these steps to establish your budget plan:
- Understand your business sales cycle and develop a sales funnel. This helps to determine where and how you’re going to be spending your money. By understanding the process your audience goes through to become a paying customer can help you identify where you may need to incorporate digital marketing strategies — to prevent less people from falling out of the funnel.
- Know your outside costs. Prepare by taking any overhead costs into account as well. You don’t want to get to the end of your planning and realize there are operational or payroll costs that you didn’t account for (causing you to reallocate your entire budget!).
- Determine your business goals. Planning a budget around what you are actually wanting to achieve can help you stay on track and keep you focused on what really matters — whether that be increasing leads, earning more sales, getting more membership signups, or increasing brand awareness.
Plan for the unplannable
A survey by Gartner found that 78% of Chief Marketing Officers expect digital advertising marketing budgets to see a drastic increase from 2020. In their survey, they also found that many businesses — nearly 44% of those surveyed — faced midyear budget cuts because of the effects of the pandemic and as a response to a lack of cash flow.
Plan a marketing strategy for 2021 that allows you the most possible flexibility with your marketing dollars. Create an annual plan with a rolling 12-month forecast and run a P&L from 2019 to give you a reference point from a typical year.
Begin by predicting your sales for 2021 and closely monitor your business’ actual progress, adjusting your expectations as the year goes on. Set up quarterly and monthly reviews to adapt as needed, and perform campaign budget optimization frequently to maximize ROI for each of your campaigns.
5 tips for optimizing your budget
Consider these tips as you move forward with your budget planning:
- Change your strategy based on how your customers’ needs have changed, this will help to improve your conversion rates.
- Provide value-rich services and plan for the possibility of budget cuts (it’s better to be over prepared than underprepared).
- Embrace digital marketing and brand-building strategies.
- Focus on marketing to your key audience and your most qualified leads.
- Be FLEXIBLE!
Having the flexibility to adapt to changing circumstances will be crucial to a successful 2021. Be transparent with your measurement and ROI, as these figures will be leading you through the next few quarters. You’ll want to have a true understanding of where your business stands and be able to show the value of your budget, to later make increases or decreases when called for.
The future is a little uncertain, but embracing the uncertainty and adapting to the changes in the market will offer huge profit gains and success in 2021.
The experts at UpSwell are here to help you build a digital marketing strategy framework that drives results — and we can help you choose the strategies that work with your budget. We’ll even get you started with a free marketing assessment.
Contact us today to speak to one of our marketing specialists in your industry!