Everyone talks about strategies, campaigns, trends, AI… but very few bring up the truly sensitive topic: the marketing budget.
How much do you invest? How do you divide the money? What does “enough” mean? And, more importantly: how do you make sure you don’t throw money away?
Let’s take it step by step. Short, logical and applied.
Step 1: The objective. The question is simple: how much money do you need (no, the answer is not „as much”)? Set a net profit target, after you’ve given the state what’s the state’s and paid for everything else. Leave aside the „to increase brand awareness” part for a moment.
Step 2: Calculate backwards. Think from top to bottom: For X profit → how many sales do you need? For that many sales → how many leads do you need? For that many leads → what budget do you need? This works well if you know your house rules: how much profit a sale leaves you and how many people you need to explain it to before they buy (conversion rate).
Step 3 : Allocate your budget wisely. Here you divide the amount calculated according to the 70-20-10 rule.
That is:
- 70% of your money goes to what you know for sure works. On the channels that already bring you customers.
- You put 20% into testing. New channels, with potential, but which are not yet secure.
- 10% is for experiments.
Step 4: Track weekly. You look at the numbers, without exception: CPA (how much a customer costs you), Conversions, ROI (profit).
Step 5: Optimize monthly. Act on data: what doesn’t work, cut mercilessly. What brings profit, put more money there.
And the magic formula: If the Cost per Customer Acquisition (CPA) < 30% of the Average Customer Value, then it’s good.
If not, you know exactly where it hurts and what you need to fix.