B2B Marketing Mix & Budget Benchmarks



Back in Lesson #171, I wrote about the Basics of B2B Marketing. This lesson takes the discussion to the next level, and talks about how much budget should you set aside, and more specifically, how that overall budget should be split up, across marketing tactics.

To help me here, I referenced data from the 2013 Tech Marketing Benchmarks Study from IDC. The study basically suggested that most B2B tech companies spend around 4.5% of their revenues on annual marketing spend. The average was 7.0% for B2B software companies, 3.9% for B2B hardware companies and 1.9% for B2B tech services companies. So, in the example chart below, that would suggest a company shooting for $5,000,000 in revenues, would have budgeted $225,000, or 4.5% of revenues, on average. That spend would cover both the media dollars and the team implementing such initiatives.

The study further goes on to recommend a mix of how your overall B2B marketing budget should be spent, based on the marketing mix reported by the comparable companies in their study. I applied that mix to our $225,000 overall budget below, as a case study. For your business, you would simply adjust the below chart for whatever revenue target you are shooting for, times the 4.5% average (or the other percentages suggested above), times the percentages by tactics recommended below.

For convenience, the first part of the chart looks at the mix by marketing type, the second part of the chart looks at the mix by marketing channel (e.g., digital vs. offline) and the third part of the chart details the suggested mix solely for the $76,500 digital marketing budget, in this case study.


Here is a link to the data from IDC’s 2013 Tech Marketing Benchmarks Study, to which the above chart was based.

The above is not intended to be a perfect science, but more a rough ballpark to help point you in the right direction. As an example, the mix of things you would do for a $1MM business, would be different than the mix of things you would do for a $10MM business. But, the above should help to get you close.

So, long story short, B2B revenues should not solely be driven by your sales team. Your sales team needs support, in the form of leads coming to them from your marketing efforts. And, the above, is a good way to help you calculate how much marketing budget you should set aside, and how best to spend that budget. And, thank goodness you are not a B2C business, where your marketing budgets could be 10-30% of revenues!!



Reprinted by permission.

Image Credit: CC by Stephen D

About the author: George Deeb

George Deeb is a managing partner at Red Rocket Ventures, a Chicago-based startup consulting and fundraising firm with expertise in advising Internet-related businesses. More of George’s startup lessons can be read at “101 Startup Lessons — An Entrepreneur’s Handbook.”

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