A simple formula for creating your marketing budget

Hi hi,

How’s your week been?

One of my subscribers asked how to figure a marketing budget.

There are many ways to skin this cat.

But, here’s a simple formula I gleaned from one of my online mentors - Dave Gerhardt.

First, it's different for every company depending on the appetite., here goes:

• The budget should be based on your new revenue targets. So let’s say you want to add $5M in NEW revenue.

• Divide $5M in NEW revenue by your average basket value/average contract value. This gives you the number of customers you need to purchase from you or acquire.

  • $5M in NEW revenue / $1000 = 5,000 customers.

• Multiply 5,000 customers by your cost of customer acquisition (CAC) - - - so let’s say it costs $200 to make a sale. That’s $1M.

• That’s your marketing budget.

How do you think about budgets for your marketing plan?

Weekly rant

The bullshit curve of marketing:

Freshers in marketing want to sound more experienced.

So they use a lot of jargon and buzzwords

Then, as they get more confident in their abilities and experience sets in, they park the bullshit terms and speak like normal people again.

Not everyone though!

I would also love it if you could share this with anyone you feel would find this useful.

It’s true that the best people come through referrals, so I had to ask 🙂.

You can forward them this email via the share button.