How high should the marketing budget be in relation to B2B sales?

Your company is active in the B2B sector and you are now asking yourself how high the marketing budget should actually be? This is usually based on the annual turnover. What percentage of the budget should you allocate to marketing? We have taken a closer look at the factors.

How high should the marketing budget be in relation to turnover in the B2B sector? On average, a German company plans 6 percent of turnover for the marketing budget. This value does not differ between B2C and B2B. However, the amount that suits your company depends on your target group, your current market position and the size of your company.

There is no fixed amount that the marketing budget should have in the B2B sector. It is a figure that is completely individual and directly dependent on your company and its position on the market.

Incidentally, personnel costs are a major cost factor when planning the marketing budget. If you set up an internal marketing department, you will have costs for premises and staff. An alternative is an external marketing department where experts are available for you. You can find these at MORE.

The marketing budget - what does it include?

Even before determining your marketing budget, it is important to look at which points are included. People often underestimate what needs to be taken into account when calculating costs. We have put together a brief overview for you here:

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• Personnel costs: The amount depends on whether internal or external personnel resources are involved.

• Design: The creation of videos, photos, graphics or programs must be included in the costs.

• Production: Production costs are incurred, for example, when printing posters or flyers.

• Implementation: The costs for implementing the strategy are taken into account here, for example for events.

• Consultations: It may be necessary to seek external advice, such as legal advice.

• Tools and software: If you need special tools or software for marketing, these costs should also be factored in.

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How to determine your marketing budget

There are various methods you can use to determine your marketing budget from B2B sales. We have broken down the methods for you here. This way, you can check which one suits you and your company best.

1. the percentage method

Many companies like to use the percentage method. Here you determine the percentage of your turnover that is used as a marketing budget. It is a method that is based on the turnover and budget of the past. This means that you have little effort, but current developments are hardly or not at all taken into account.

2. the competitive method

The second variant is the approach of the competition-oriented method. Let's take a closer look at this. In this form, you set your marketing budget on the basis of your competitors' figures or the average figures from the industry. However, this only works if you know your competitors' figures. Moreover, this method only makes sense if you are implementing similar marketing strategies. It is better to focus on your own developments and base your budget on them.

3. the update method

The extrapolation method can actually be compared with the percentage method. Both variants are based on the past and are based on the figures used in the budget to date. You set the same amount year after year. Although this is a very predictable method, it is now considered outdated. Current marketing successes or mistakes are not taken into account. There is no view of how your position on the market has changed in the last year. Market conditions also change. If you don't adjust your marketing budget, you will hardly be able to keep up with these changes.

4. the focus on financial strength

Here you are guided by your company's existing finances. In order to be able to implement marketing measures in the B2B sector, you first need to take a look at your resources. This ensures that funding is actually available. However, this method makes it difficult to establish the link between the budget used and the revenue generated.

5. target orientation

As an experienced external marketing department, we would like to focus in particular on this method for determining your marketing budget. Even if you have significantly more planning work here, you will benefit greatly from the accuracy.

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The basis for the calculation method is your company's marketing concept. As soon as your concept has been defined, the costs associated with the individual milestones are determined. The sum of the costs becomes your marketing budget. In this way, you achieve the perfect harmony of cause and effect.

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You create an overview of your initial situation, derive the goals for your marketing and plan the measures. Only after this step are the costs determined and checked to see whether your finances allow you to finance them. The budget can then be determined.

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Of course, you can only work with estimates in some areas when planning. Over time, however, you will gain experience in estimating your costs. It is even more effective if you work with a reliable and transparent partner for every measure. At MORE, we attach great importance to always presenting the costs transparently.

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Determine your marketing budget from B2B sales in the following steps:

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1. Initial situation: You check the current status of your budget and turnover and get an overview of your initial situation. How high was your marketing budget in the previous financial year? Was it sufficient? Do you have anything left over? Did you reach all milestones? The answers to these questions will give you a good basis for the next steps.

2. Set goals: You now know your starting situation and whether the previous budget was sufficient. Now it's time to set your goals for the coming period. What do you want to achieve? Feel free to give concrete figures that you can use later for monitoring purposes.

3. Set milestones: How can you achieve the goals you have set? This is where the individual milestones of your strategy come into play. Define the steps and create a concept. The concept is best created by experts. We at MORE will be happy to assist you.

4. Set the marketing budget: You have now reached the point where you know both your goals and the measures required to achieve them. Now check the costs for the individual measures, for example by comparing offers. This allows you to calculate your budget and check whether it can be financed.

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But what happens if the required budget and financial feasibility do not match? In this case, it is important to review your B2B marketing priorities and make adjustments.

For a better overview of costs, it is also advisable to regularly check whether the marketing budget is being adhered to. This protects you from unpleasant surprises due to unforeseeable costs and also allows you to recognize whether a correction of the B2B marketing budget or marketing measures is necessary.marketing is not an expense - it is an investment

Of course, on paper, marketing for the B2B sector may seem like a high cost burden for you. After all, this is a proportion of your annual turnover that is directly reinvested. In reality, however, this is not actually an expense, but an investment.

Even for B2B-focused companies, marketing is the basis for leads, visibility and sales. Generated leads often turn into new customers. This is a successful marketing budget, so to speak. This means that the money invested has led to a certain turnover per project or product. The more detailed your planning is, the easier it is to see whether individual measures have been particularly successful and which marketing milestones have contributed the most to your sales success.

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Support from external service providers

Especially when planning the ideal marketing budget, it is helpful to consider whether support from external service providers should be utilized. In fact, the percentage of companies opting for external providers is increasing. The concept of an external marketing department is particularly popular. The associated costs are variable, as you only use the services of external providers when needed.

At MORE, we offer you an external marketing department. Our team of experts is excellently positioned and enables the implementation of individual measures or even an entire concept.

Conclusion: The marketing budget of B2B sales as a variable in planning

As a reputable external marketing department, we cannot answer the question of how high your marketing budget should be with a fixed figure. However, we can give you helpful insights into the various calculation methods and show you how to calculate the marketing costs in relation to your total turnover.

At MORE, we use the latest marketing methods for the B2B sector to create an optimal balance between effort, cost and success. We can discuss an individual offer in a personal meeting so that you receive an initial estimate for your marketing budget planning.

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