“How much should I be spending on marketing?” That is a very important and common question we hear at ThinkResults. Traditional guidelines indicated that about 10% of revenue should be spent on marketing for the average B2B company. Some interesting research on what successful companies actually spend on sales and marketing looks a bit different though.
Turns out that there is a bimodal distribution that is a function of whether your company is a younger high-growth company or a more mature company with a well-known brand.
For companies that are young and/or in high growth phases, such as salesforce.com, Twitter, Marketo and Constant Contact, the norm is that they are spending between 20-50%+ on sales and marketing and seeing anywhere from 15-111%. Now that is what I call return on marketing investment!
Also interesting to note in this research was that larger, more mature companies such as Intel, Microsoft and Apple, tended to spend a smaller percentage of their budget on sales and marketing. Of course, their revenue is substantial so 7% of Apple’s revenue is nearly $12B …. This shift to a lower budget makes sense both in terms of the percentage of revenue is still a lot of money with which to make noise in the market. Additionally, established companies don’t have to make as much noise to be noticed since their brand recognition is extremely high.
For the full details of the research, head on over to the great blog post Sarah Brady of Vital Design, and see the full infographic below.
How does this data compare with your company spend, and your marketing plans for this year? Does this fit with your experience?
Until next time,
How does your budget compare?
Jenn LeBlanc, CEO & Founder of ThinkResults Marketing, works with tech CEOs and CMOs to drive results. Whether it is a 350% increase in web traffic, a 1400% increase in online leads, or a 400% increase in conversion rates, Jenn and the ThinkResults team deliver results.
Check out our free online quiz about the 10 Elements of a Successful Launch, including the budget/funding element, to see where you fit and what you need to do next. Or simply set up a call with me, and we can talk about your particular situation and how to make your marketing budget work for you.