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Hosted by Steve Phipps of Wayfind Marketing, The Growth-Minded Marketing Podcast simplifies marketing for B2B CEOs ready to grow with confidence. Each episode offers real-world strategies, step-by-step coaching, and inspiring CEO interviews—all designed to help you align your marketing with your business goals, stop wasting time and money, and scale without the stress. If you’re a growth-minded leader tired of vague advice and underperforming tactics, this is your next step.
Steve: You actually know how
much your company should be
spending on marketing right now.
Not a guess.
Not what you spent last year, but what
it should be tied to actually where
you want to go with your business.
AnnieLaurie: If you don't have a clear
answer to that, you're not alone,
and this episode is exactly for you.
Welcome back to the Growth Mind
Marketing podcast, the show for B2B
CEOs and business leaders who are
ready to grow with confidence and
stop guessing at their marketing.
I'm Annie Laurie Walters, content
strategist at WAY Find Marketing.
Steve: And I'm Steve Phipps, CEO, and
founder here at Wayfind Marketing,
and we're really glad that you're
here with us today because we're
tackling a question that I, that
I get asked on a regular basis.
AnnieLaurie: Which is
Steve: How much should my
company be spending on marketing?
AnnieLaurie: such a simple
question, not such a simple answer.
Steve: Exactly, and that's why we
are going to unpack this today.
We're gonna give you real numbers
a framework and help you figure out
whether what you're currently spending
is structured correctly, because that
part matters just as much as the amount.
AnnieLaurie: Steve, I love this topic
because it's one of those things where
everyone has an opinion, but nobody
really wants to show their cards.
Like what does marketing actually cost?
today you're gonna show us your cards.
Steve: All the cards, so let's go.
AnnieLaurie: So Steve, let's
start with the honest reality.
Why is this question so hard for
most B2B service companies to answer?
Steve: Because most of them haven't
had to think about it before.
You know, if you've built your
business on referrals, relationships,
on a sales team, that's really good.
Well, marketing hasn't been aligned
item that you really needed to wrestle
with because word of mouth was working.
Until it wasn't.
AnnieLaurie: And I think
that's such a relatable place
for a lot of our listeners.
You've grown a really solid company.
Maybe you're at 5 million, 8 million,
10 million in revenue, and you did it
largely without a formal marketing system.
Steve: Exactly, and that's not a failure.
It's a great sign that your
product or service is strong.
Your relationships are strong, but there's
a ceiling on referral based growth.
And, and when you hit it, you realize.
I actually need to build something here.
I need something
structured and formalized.
And most B2B companies, especially
service-based companies that we work
with, they don't have a map for what that
looks like, let alone what it should cost.
AnnieLaurie: What are some of the
other situations that you typically
see when this question comes up?
Steve: There's a, there's a handful.
The first is what we just described.
Company has grown on referrals.
They've, they've reached
a ceiling with that.
Now they need marketing that's
gonna generate qualified leads.
The second is they're already spending
marketing dollars, but they're
not confident that it's working.
Something's happening, money's going out
the door, but they're not sure if it's
the right amounts or on the right things.
AnnieLaurie: And that one hits
close to home for a lot of people.
Steve: It.
It really does.
And the third is marketing is working at
a basic level, but they want to scale it.
Maybe they're going into a new market,
introducing a new service line, or they
just have more aggressive growth goals
and they're not sure how to calibrate
the investment for that next phase.
AnnieLaurie: So those are very
different starting points, but
the same underlying question.
Steve: Same question, same
framework, and that's the good news.
AnnieLaurie: Okay, let's get into it.
What are the actual numbers here?
What should a B2B service
company be spending on marketing?
Steve: It's, it's a range and typically
what I would recommend is between
three and 10% of annual revenue.
And before anybody just stops the podcast
here because they feel like it's too
vague, let me give you some guidance
and map mapping inside of that range.
If you're currently maintaining
your current growth you're stable.
You're not trying to do anything dramatic.
You're probably looking at three to 5%.
If you're pursuing steady intentional
growth building something year
over year, maybe five to 8%
of your budget is realistic.
And if you're going after aggressive
growth, new market, launching a
new service line, that's where
you're gonna start getting
into eight and even up to 12%.
And.
If you're early stage, you're, you're
building from scratch, you might even be
closer to 12 or 20% at least initially.
AnnieLaurie: That's really helpful
context, so it's not just pick
a number, it's tied to what
you're actually trying to do.
Steve: Exactly.
And in our experience of working
with B2B companies most tend to
fall towards the lower end of these
ranges during steady growth phases.
They move up or add budget when
a specific goal justifies it.
Or if they've had an increase
in what they're trying to to do.
It's not just spend more and win more.
AnnieLaurie: Okay, Steve, give
us like a dollar figure here
so it feels more tangible.
Not just percentages.
Can you do that?
Steve: Sure.
So for a $5 million company doing
5 million in annual revenue work.
We'd be talking about a budget of roughly
between 150 to 300,000 in annual marketing
investment for a million dollar company.
You know, again, depending on the
percentage and the goals, that could be
anywhere between 300,000 on the low end,
up to a million dollars on the higher end.
AnnieLaurie: Yeah.
Yeah.
When you say it like that, I
think some people hear that
and go, wow, that's a lot.
But when you frame it as a percentage
of revenue, it starts to feel
a little more like a business
decision than this huge expense.
Steve: Well, and, and that's exactly
how we want people to think about.
And actually it's, it's
not an expense line.
It's an investment.
Growth.
AnnieLaurie: Absolutely.
Steve: the companies that treat
it that way are the ones who see
compounding returns over time.
And, and I also just want to point out
here that if you're looking at your
marketing investment just as a single
line item, it's going to look intimidating
because if you don't have clarity in what
you're actually doing with the budget,
which we're gonna talk about shortly.
Then it looks very nebulous, but when
you start to break it down and understand
what's required, and it's correlating
your budget to your growth goals.
So it's not just looking at marketing
and your marketing investment
in a vacuum, it's correlating it
to what your growth goals are.
And it's the understanding that if
you don't invest here, you're not
gonna hit your growth goals there.
AnnieLaurie: All right, so we
know the range, but one of the
things I think is really important
here and something that you.
talk about a lot is that it's
really not just one number.
A marketing budget is actually
a system with categories.
Walk us through that a little bit.
Steve: Absolutely.
And, and this is the part where I
think a lot of companies go wrong.
They, as I mentioned a minute
ago, they, they think about
marketing as a single line item.
You know, we spend X amount on
marketing and, and yes, it all
rolls up, but we actually break
it into five distinct categories.
And the balance between them
matters as much as the total.
AnnieLaurie: Okay.
Give us the five.
Steve: All right, so number one
is category that we would call
marketing, leadership, and strategy.
So this includes things like your
marketing manager's salary, potentially
bringing in a fractional CMO, chief
marketing officer, a marketing
coach, or even a strategic agency,
and having them on a retainer.
And a lot of times this can
go very underfunded because.
The, the desire is to
go straight to tactics.
When really, especially when you're
getting a marketing program up
and running, you wanna make sure
that you're investing well in
strategy, so you're getting things
set up correctly on the front end.
So you avoid a lot of the
mistakes that you make.
Otherwise this is a very
consequential category.
AnnieLaurie: It is.
And why do you think that, that, why
do we get in this conundrum where
people kind of feel stuck between
the strategy and the tactics and
tend to wanna rush the tactics?
Like what's the, what's the hold up there?
Steve: Well, I, you know, I think
about a lot of the CEOs that I
work with and that I know, and
there's just a bent towards action.
Let's do, let's make things happen, and.
When it comes to marketing, there's
absolutely let's execute, but instead of
the approach of Ready, fire, aim, which is
where a lot of people get into trouble, I.
You know, let's ready, aim, fire
and take the time on the front
end to make the investment.
Again, this is, this is addressing
companies that are trying to
grow and scale for the long term.
This is not for companies that are
just looking for a quick win in the
next 90 days, and that's their focus.
Yes, there's a place for that,
but this is for companies that are
looking to grow and sustain growth.
Marketing has to be done strategically.
The investment needs to
be there to back it up.
AnnieLaurie: Yeah, I've heard you say that
so many times, all these years working
together and it never gets less true.
Steve: Well, it, you know, it's
the, it's the it's the quote
I think it's Vince Lombardi.
Hope is not a strategy.
And so when you just go straight
into tactics, it's, you're basing it
on hope rather than a thought out,
intentional strategy based on your
buyers, their needs, your strengths.
Et cetera.
AnnieLaurie: Mm-hmm.
And how relieving it can feel
to not oh, I hope this works.
You don't have to live that way.
Steve: Exactly, and I think it's
worth noting that, that when
we're discussing marketing, we're,
we're, we're thinking about this
in context of a marketing system.
AnnieLaurie: Yes.
Steve: there are different components
of marketing, which we're going
through here as we talk about these
different categories in the budget,
but it's the pieces working together.
To achieve measurable results so
that you can at the end of the day,
correlate it back to your investment.
So it's not just putting money into this
marketing pot and hoping it gets some
results, but measuring it strategically
so that you can see what your ROI is.
Now that's not a perfect science.
Tracking can be a challenge sometimes,
depending on the systems, but, but
that's the goal, is have a system where
you can track it and see the results.
And so, and so speaking about these
categories, the, the second category
is website digital infrastructure.
So this is your website, your foundation
for search engines and AI search.
Analytics, your CRM integration.
These are foundational investments.
It's, it's like anything
else in your company.
You've gotta have tools.
You've gotta have systems,
you've gotta have processes.
And so for this line in
particular, everything else
runs on top of what's here.
And if this foundation is weak execution
spend, doesn't LA land anywhere solid?
AnnieLaurie: And what's the next one?
Steve: So the next one is
content creation, and this is
actually a very high leverage
investment for most B2B companies.
This is where you're
creating educational content.
So this could be articles on your
website, videos, case studies, email
marketing, social podcasts, like this one.
Content supports the
search engines AI search.
It feeds email your social
when it's done correctly.
It's content that your sales team can use
to speed up the buyer's journey and the
sales process qualified people better.
It answers buyer's questions before
anyone ever picks up the phone and.
How a company approaches content varies.
Some are gonna build their
content engine internally.
They have subject matter experts, they
have an in-house marketing person,
or they're planning to hire one.
Some companies choose
to outsource production.
They don't have that expertise in-house.
They don't want to manage it, and so
they would partner with somebody that
provides that for them so that they can
stay focused internally on delivering
their products and services and.
Each has their place, each has their
pros and the cons, and each can
work well depending on your team
and how much bandwidth you have.
AnnieLaurie: You know, you back to the
podcast, you know, we were talking about
strategy and not just rushing to tactic.
know, if you're gonna go out and you're
gonna invest this time and this energy
to start creating, producing a podcast
and you don't know why, like, we're
just going to do this 'cause it's coal.
People are doing it.
Like, I've got this friend who does
a podcast and they're getting a
lot of leads for their business.
You know, there, there has
to be the strategy behind it.
I think that's just something,
it's a great example of something
that's like the shiny object of our
day that people wanna rush into.
Steve: And, and for some CEOs and
business leaders, this is a challenge
because exactly what you just said.
I've had the conversation with multiple
CEOs and business owners who might
bring an idea to me and say, here's
something that I think I want to do,
and sometimes it makes sense sometimes.
Digging in asking follow up questions,
it becomes clear, no, this isn't the best
option for you for any number of reasons.
And so it's always important.
Again, it comes back to having the system.
It comes back to having a
strategy where what you're doing
is aligned with your goals.
It aligns with the tools and the
processes and the expertise that
you have, and it makes sense
ultimately based on your buyers.
AnnieLaurie: But along these lines, say
the strategy supports it and you wanna
go forward with something like a podcast,
would you say that it's almost always
better to outsource that type of work?
Steve: You know, I know some people
hate the answer I, it depends,
AnnieLaurie: Sure.
Steve: Because it depends on what
kind of expertise you have in house.
AnnieLaurie: Hmm.
Steve: There are some companies where it
makes sense if they have the bandwidth,
if they have the expertise, they have a
marketing manager in-house, and maybe that
person's responsible for content creation.
There are some companies where
it absolutely makes sense
for them to hire a video.
Manager, somebody that's shooting
video and recording and editing.
You know, I'm a coach for a sales
and marketing framework called
Endless Customers by Marcus Sheridan.
And that's one of the things that's
a part of that framework is getting
your marketing manager somebody
that's creating the content and owning
that, in some cases owning video.
But there are definitely some things that
it does not make sense to try to hire for.
It makes sense to outsource sometimes.
That could be website development.
Graphic design.
If you are, if part of your strategy is
running pay-per-click ads or some sort
of other paid acquisition, it might
make sense to outsource that to somebody
that has that dedicated expertise.
So again, I would say it depends on
who you have, who, how much you want to
manage in-house and, and what's gonna be
the most efficient, cost effective, and
generate the best ROI in the long run.
AnnieLaurie: You know, you just
mentioned endless customers.
Your, your coach for that framework
used to be called, they ask you answer.
Some people might be familiar with.
That name before their recent rebrand.
But you know, one thing that they
continually emphasize is that the
content that you are generating
should be answering the real questions
that your buyers are searching for.
Steve: Absolutely 100%.
And that's why this category of
creating content is so important
because it's content built around
buyer questions that will consistently
outperform content just based around
what the company wants to say.
If it's something different and.
You know this, at this stage of things,
I, I wanna make a quick note here that
what we're going through, we, we have
a, a framework that we have built out
called the Guide Marketing Framework.
And, and these correlate to that.
So generate a, a story and a strategy.
It's the first step.
Invest in your strategy, upgrade
your online presence, invest in
your website's infrastructure inform
with content, which is the third
part of that framework, and that is.
Make sure you're investing
in creating good content.
We've got other episodes where we
talk about why that's so important,
but just understand that you're
investing in educating your buyers
so that they become more qualified.
You build trust and you're more likely
to convert folks into customers.
AnnieLaurie: See back to
the overarching categories.
We were kind of start the
Steve: Yeah.
AnnieLaurie: out with what, what is the,
the next one, you know, we're kind of
looking at the budget and these buckets.
What's the next one?
Steve: So this next one is
marketing execution and promotion.
So you're creating content, but
in some cases you are gonna be
investing in Google advertising.
You're gonna be outsourcing one of those
things that may make sense to outsource,
could be support doing search engine
optimization, as well as what's now
being called answer engine optimization.
So, optimizing your website and your
content for AI search tools like Gemini,
Chad, GPT, and Clawed and perplexity.
That could even be getting into things
where we have some clients that do
trade shows where that makes sense.
So this is where you're investing in
different types of marketing activities.
And so depending on where you are and
and what this looks like, this, this
could be a pretty significant category.
AnnieLaurie: Steve, do you,
you get on Reddit ever?
Do you?
Do you look at Reddit?
Steve: On occasion.
On occasion, I think you probably
spend more time there than I do.
AnnieLaurie: I, I like, I, I got
the, you know, Enneagram Wing
five, I'm kind of a researcher.
I like to do a deep dive.
And so yeah, I was just reading a Reddit
thread on a B2B board that was talking
about how companies are really doubling
down on that, that SEO work right now.
They're, they're, that is where
they're spending a lot of their money.
They're going out to outsource.
SEO support bat link work.
You know, how do we get to appear in Claw
in Chat, GPT and these, all these other
places that people are wanting to show up.
That is where they are spending the money.
Even to the extent of
drawing back on ad spend.
They are doubling down on
outsourcing to companies.
Because to like your point
earlier that you said.
Just take backlinks alone.
You can build an entire business off
of being an expert at making that
work and understanding how it works.
And now that we have to make it work
on traditional search results and AI
generated search results, it even more
justifies hiring an expert who makes it
their life mission to be great at that.
I don't know.
Steve: And to go back to the well and,
and to go back to the strategy level
because the marketplace is changing.
I mean, we're seeing changes now
because of AI across the board,
both in terms of how marketing is
being executed, but even more so how
buyers are researching and vetting.
Companies that they wanna
work with and partner with.
So that's impacting sales.
People are coming in more educated.
They can get information that in
the past they wouldn't have access
to except through a salesperson.
And so this is where to go back
to the, the strategy level.
That's where having a fractional CMO
or a marketing coach or even a, an
agency that is truly strategic, not
just in in name, but in, in actuality,
to give some of that guidance because
there are a lot of moving pieces and
there are a lot of talking heads.
And so as a CEO, it's easy to get
inundated with all these different things.
Well, you should do this.
Well, we know this.
You know this company over here
in our Vistage group is doing this
or this peer group over here in
our industry, they're doing this.
And so you just get all of
these conflicting voices.
So to have somebody that can be that.
Strategic perspective, again, as a coach
or CMO or your agency to help you filter
through that can be really valuable.
But again, that goes back to investing
in that strategic and not just
going straight into the tactics.
AnnieLaurie: Do you ever work
with CEOs and you see sort of an
imbalance there between investing,
marketing, budget in the strategic
side as opposed to the tactical side?
Steve: I.
You know it, I would say it depends.
I think there are, there
are seasons as well.
So let me, let me clarify that sometimes
your budget initially is gonna be heavier
on the strategic end if you're just
building out your marketing program.
Because that's where you're
doing a lot of the groundwork,
identifying your ideal clients.
Sometimes that's called an ICP
ideal client profile, or your
marketing personas, or your avatars,
whichever term you want to use.
And so there's initial groundwork
to build out the strategy to help
set the direction for the tactics.
So in the long run, the investment
on the strategic is going to
decrease, although it may.
Bump back up.
Depending on if you're launching a new
service, going into a new market, it might
require additional investment into that.
So again, it depends on where a
company is in the life cycle as to
what the proportions are, strategy
versus execution, et cetera.
And, but again, that's where when you
develop a strategy, you get a sense
of where you're spending your dollars,
where you're investing your dollars.
Based on what your goals are and what
the outcomes that you're looking for are.
So again, it's, we can give
you ideas and ranges, but it
comes down to your situation.
How much does it cost to
actually acquire customers?
What's the length of your sales cycle?
And there's different
factors that go into it.
AnnieLaurie: Great.
So what, back to the categories and,
and the, the buckets and the budget,
what do we, what have we missed?
What have we overlooked?
Is there anything else?
Steve: So.
So the fifth category are
the tools and the platforms.
So these are the things that you
need to execute your marketing.
And this is gonna vary because if
you're outsourcing your marketing
to an agency, you're not gonna need.
All of these tools, whereas if
you have somebody in-house, you're
gonna require certain tools that
you wouldn't need otherwise.
But this is, talk about CRM.
So HubSpot is a very familiar CRM
that a lot of people are familiar of,
familiar with, or they've heard of
tools that generate, you know, marketing
and automation, Google Analytics,
and some of these are free tools.
Google Analytics is a free tool.
But then.
Tools to schedule content,
sometimes reporting dashboards.
The key here is that the tools
should support a system that
exists or that you are building.
You ke if you buy a tool hoping that they
create a system that's gonna break down.
So start, lean, add the tools that
you need as the system matures.
You know, don't start with Salesforce
if, if a much simpler CRM is gonna.
Give you what you need.
AnnieLaurie: I feel like so many
companies have this graveyard of
tools they bought, never fully used.
Steve: Yes.
AnnieLaurie: Yeah, and
Steve: just about every single one.
AnnieLaurie: Yeah, it's just, there's just
a level of technical debt there and there.
Even that's something that needs to be
thought through strateg strategically
even that is something that needs
to be thought through strategically.
Which tools are we gonna buy?
You know, like we, we don't just
buy it because we watched one
video and it was convincing.
Or, your, you know, part, like you
said, your person in your, your peer
group is using, it works for them, you
know, there's more to it than that.
Steve: It's, it's I'm, I'm thinking
of two client examples right now.
One client, he.
Is a big fan of App Sumo, and that's
a website where you can generally
pay one-time fee, usually less than
a hundred bucks, and get lifetime
access to whatever that tool is.
Usually these are up and coming tools
that are trying to build their market
share, and so it, it works out really
well because sometimes when we need
some kind of a tool, it's something that
at some point he purchased because he
anticipated a time where he would need it.
Now the benefit there is he doesn't
have this ongoing monthly subscriptions.
There's another client who over
the course of the last year,
we tested out a tool that would
identify anonymous website visitors.
And so they had one tool that they
were using called LeadLander, and
then took about eight or 10 months to
test another one that initially looked
like it would be a better option.
And after testing it, they went
back to Lead Lander and it was.
Partially it was based on
how it was interactive.
It was the quality of the data, but
then it was also how it was interacting
with the workflows of nurture email
campaigns and things like that.
And so sometimes it's testing a tool.
Realizing it's not gonna do
what you think it's gonna do.
And, and being cognizant of that because
especially with AI and the shift with
how marketing is being executed, there's
an abundance, there's an overwhelming
number of new tools, and so you just
wanna be careful that you're not just
getting new tools because it's the the
sexy new thing, and you wanna make sure
that you're strategic about that as well.
AnnieLaurie: Steve, I'm
gonna shift gears a bit.
heard you talk about operating models.
In the context of this discussion, can
you walk us through what, what that means?
What are the operating models?
Are there just two or there three?
What?
What is that?
Steve: Yeah, so this is important
'cause two companies at the same
revenue level with the same budget
can get different results based on how
they've structured their investment.
And so the, the two models, and it's
not that these are exclusive 'cause
sometimes there are variations of
this, but just for simplicity's sake,
we're talking about two models here
When it comes to your marketing.
One is your outsourcing.
Your marketing execution to an
agency, and the other is you are
keeping the majority of it in-house.
You've got a marketing manager, you're
planning to hire a marketing manager.
AnnieLaurie: I know it's familiar
to probably everyone listening, but
just unpack the outsource agency.
What, what's that look like?
Steve: Yeah, so in that scenario.
A significant portion of your
marketing budget is going to your
agency that is covering strategy,
execution, and in some cases the tools.
Now, again, you're gonna have other line
items in your marketing budget if you're
doing trade shows and things like that.
So, but a heavy portion or a significant
portion of your budget will be going to
your agency because you're effectively,
effectively hiring a marketing team.
And this is a good scenario for
companies that have zero internal
marketing capacity and they're
looking for full service support.
We've had clients who, they've
tried somebody in-house and for
whatever reason, no, any number
of reasons, it just didn't work.
It was not the best scenario for them.
Now a risk of this, and we've talked
about this on the podcast before, is
that hiring the risk is when you hire
an agency that acts like a vendor.
Instead of a strategic partner,
they're, they're executing, but they're
not giving you strategic guidance.
They're not pushing back when
they see a potential pitfall.
And a lot of times they're asking
you what you want to do instead of
coming to you with recommendations and
giving you the strategic guidance that
you should be getting at that level.
AnnieLaurie: Yeah, we usually
talk about that in terms of order
takers versus strategic partners,
and you want a strategic partner.
Steve: Oh, absolutely.
And you know, that makes a big
difference in the strategic
model, in the outsource model.
'cause a lot of the companies that we
end up working with have had a bad agency
experience where folks were just, they
were creating content, but it wasn.
Dialed in.
It wasn't strategic, and they
just became order takers.
AnnieLaurie: I am thinking of a new
client that we've had the pleasure
working with lately, who is just
really happy for the expertise.
Like, I pay you to do that.
You know, they, they want,
they want the expertise.
They want to be led.
That's why they're calling you.
I get it's frustrating to ace.
CEO who hires a outsource marketing team,
and they're saying, what do you wanna do?
Like that's our job is to
Steve: Yeah.
Yeah.
EE, exactly.
Because I mean, if you're working
with a good agency, it's not going
to be, it's not gonna be cheap.
And you should be getting
executive level guidance from
your, your marketing partner.
AnnieLaurie: So what about the
people who wanna keep it in-house?
Steve: Yeah.
So, so keeping it in-house, again,
the, the assumption here is that you're
hiring someone or you have hired someone.
And so your budget's gonna be
covering their salary training tools.
And you may still, depending on the
strategy, you may still be outsourcing
certain functions like paid advertising
that just require a specialized
knowledge that your person may not have.
And you know, this works really well
when leadership can give that marketing
manager clear strategic direction
and, and there's an infrastructure.
For them, for the marketing
person to work within.
Now, a common failure point here
is that the marketing manager
isn't getting strategic direction,
and that's a common scenario.
And that's not the fault of the CEO.
It's, it's because sometimes it's easy
to assume that that marketing manager's
going to be able to build a strategy
when often that person is very tactical
and they're looking for that direction.
The, the other challenge here is that.
You have somebody, you have a
marketing person, and they might be
very skilled or, or could easily learn
the skills, but they're not getting
the, the direction that they need.
Because oftentimes the, the, the
person who's coming into that role,
maybe it's the first time they've
done it, but they're looking to the
CEO or whoever they're reporting to,
to help give them that direction.
And often that person hasn't
managed a marketing person before.
So you get this scenario where.
Nobody's really quite sure what needs
to be done, so it's just a, it can be a
painful process of trying to figure it
out and, and usually it's 'cause there's
no strategy, there's not a system.
AnnieLaurie: So what's the solution?
Because I know a lot of our listeners are
probably sitting in that exact situation.
Steve: Yeah, so this is where, again,
as I've, I've mentioned this, we've
talked about this briefly, but bringing
in a fractional chief marketing
officer to give strategic direction.
Sometimes a marketing coach
is somebody that could help.
With strategic direction as well as
provide some training for the marketing
manager, but also can be a direct
connection between the CEO and the
marketing person and, and, you know,
looping in the sales team as well so that
everybody's on the same page and you get
that alignment between business goals,
sales and marketing, and there's some
accountability that's built in with that.
And.
You know, whether it's A-C-M-O-A coach
or somebody that plays both roles, it's
helping your internal person make sure
they have a plan and getting the tools
and the resources and the frameworks
they need to execute efficiently.
AnnieLaurie: So the CMO piece
of this isn't really separate.
of what makes the in-house
model work better, or it, maybe
that's another way to say it.
That's a, bringing in A CMO.
Fractional CMO could be a way to
optimize your in-house operation.
Steve: So sometimes you could have a
CMO who sits at the executive level.
Again, they're fractional and their role
is really just to help give strategic
direction, to help vet what's going on.
And, and be that strategic voice.
Ask questions, look at
the numbers, et cetera.
A coach is gonna be more hands-on where
they're working with your marketing
person, providing the training,
having those ongoing conversations.
And, and again, you could have somebody
who is sort of a hybrid between the two.
They're distinct roles.
But again, you could have somebody
who is playing both, which in some
cases we do that for our clients.
AnnieLaurie: And if you are listening
and wondering whether that might be
something that your company needs,
we have several articles in our
learning center@wayfindmarketing.com.
address.
All the signs, all the checklists of
if you need a marketing coach, and
we will be throwing some links in
the show notes that would be worth
a read if any of this is resonating.
Steve, let's get really concrete for
a second because I know our audience
appreciates seeing real numbers.
us what a marketing budget actually looks
like at two different revenue stages.
Steve: Definitely, and let me say upfront
that these are for illustration purposes.
This, these are not formulas.
Use them as an anchor not as a, use
them as a guide, not a prescription.
So example here, $5
million a year company.
Again, if we assume a budget
between 200 and 300,000 a year
to roughly four to 6% of revenue.
And here's how this could break down
your marketing leadership and strategy.
Again, depending on the level of
person that you're bringing in, if
you're bringing in a coach, A CMO
investing in that initial strategy,
you could say here, 80 to 110,000.
And, and again, this is significant
because this helps set everything else up.
If you don't invest here, you're probably
gonna waste money everywhere else.
Digital and marketing infrastructure.
Again, this is gonna vary because your
first year, if you need a new website,
this is gonna be a higher line item
than in subsequent years, but you
could spend anywhere between 15,000
up to, depending on the complexity
of your website, 35, 40, 50,000.
Again, there's a lot
of variables in there.
Content.
If you're creating this
primarily internally, you have
internal subject matter experts.
They're the ones handling this.
So your budget here is gonna
be pretty small because you're,
you're generating this in-house.
So the fourth category, promotion and
execution, again, depending on what
you're doing there, 35 to 70,000.
And then tools could be anywhere
between five and 12,000 a year.
AnnieLaurie: What about a larger company?
Steve: So for the example
of a $10 million company.
Let's assume a marketing budget
here between four and 500,000.
So four to 5% of revenue,
leadership, and strategy.
We're gonna bump that up a little
bit there to 110 to 150,000.
Website infrastructure again here,
20 to 50, 20 to 60,000 depending
on the complexity of the website,
what needs to happen there.
Content.
Again, we're gonna continue to assume
that that's being handled internally.
Now, there may be some budget there
that that goes towards video production.
So you could be looking at five to 10,000.
Execution 70 to 120,000 and
tools could be 8,000 to 20,000.
AnnieLaurie: I really love
how leadership and strategy is
always the largest category.
Steve: Well, it, it, it's important
that you're investing because I
mean, that's, we're gonna include
your marketing person there,
AnnieLaurie: Hmm.
Steve: leading your marketing internally.
So you wanna make sure that you have
somebody, you're investing in them, you
know, it's providing them with training,
providing them with the resources.
It's, it's making sure that, you're
staying on track, especially with
things shifting and changing.
Man, I don't know.
The CEO, who has time to.
Pay attention to everything
at the micro level.
And so here again, it goes back to
how are you viewing the investment?
Are you viewing this as an
expense or an investment?
You're, you're really, you're
building your growth engine to
sustain growth for years to come.
And so a company that's spending 200,000
on scattered tactics where you're gonna
get scattered results, a company that
invests two thou 200,000 in a system.
A strategic system is gonna
compound that return year over year.
AnnieLaurie: Before we get
to the finish line here.
I wanna make sure we cover one
additional thing that I think
is actionable for someone who's
already spending money on marketing.
You're not starting from
zero, you're already spending.
Give them like a tangible next step.
Steve: I would say here is, is
audit before you add, and, and
this is really important because
again, a lot of companies, they're,
they're spending money on marketing.
They're not investing, I'm gonna
say they're spending money on
marketing because they don't really.
Know what they should be doing.
So they're trying different things
and, and ultimately what that means
is they don't have a clear map of
what they actually have, what they're
getting for what they're spending.
So before you decide to increase your
budget or even decrease it, and now
again, there could be exceptions.
I mean, if there's something you clearly
know is not working, it's a waste of
money, cut it, pause it, but figure out
what you already have in motion first.
AnnieLaurie: So what's
that look like practically?
Walk us through.
Steve: Yeah, so list every
current marketing expense.
If you have an agency, what
are you spending there?
What tools are you using?
Are you using freelancers?
What are you spending on ads, events,
design, marketing related subscriptions.
And then for each one of those,
identify what is it supposed to produce.
Now, some of these things are gonna have a
direct line to revenue to lead generation.
Some of these won't.
But again, you just wanna
understand what is it that, why
are you spending money there?
What is it that you're expecting to get?
Some of those are gonna be clearly
measurable, some won't be, but again, you
wanna have quantitative where applicable
and qualitative, you know, is it supposed
to generate traffic leads awareness?
Is it supposed to create
efficiencies internally?
You know, again, what, what is the
job of what you're putting money into?
And then ask whether or not you
can measure if it's working or not.
If you can't measure it, then as the
saying goes, you can't manage it.
And again, in some cases
this could be qualitative.
Some things you're not gonna have a direct
metric for, but you can certainly talk
to the people who are using, they can
say, yes, this makes life a lot easier.
We can do things a lot faster,
even if they're not tracking it.
Flag, anything that that's questionable.
Anything where you don't know what
you're getting from it or what you
would continue to gain by using it and
use that as your, your starting point.
Use that to go through
and vet and assessing.
It's kind of the, the old
exercise of start, stop, and keep.
What do we need to keep using?
What do we need to stop using?
And then as you continue to look towards
strategy, what do we need to start doing?
AnnieLaurie: So the goal isn't
necessarily to be slashing and dashing.
It's something different.
Steve: Now what you're looking
for is clarity and again, clarity
of what's working, what's not.
What are the things that you're not sure
about and you just need to dig into?
Because I think sometimes
what happens is, is.
For any of us, how easy is
it to subscribe to something,
some kind of a monthly service?
I just went through
this with, with Wayfind.
I went through and I looked at different
subscription services that we were
using and realized, wait, we have two
different tools that do the same thing.
I don't need two.
I only need one.
And so.
I've canceled a handful of subscriptions
and, and sometimes you'll be amazed.
There's some things that just are obvious.
We don't need duplications or we're
paying money on this, but nobody's
used this in a really long time
and nobody's planning to use it.
And so, you know, once you've gone
through, you kinda see where you are.
You might recognize your investment
level is where it should be, just
maybe it's not structured correctly.
We saw this with one of our clients
that's in the B2B technology space.
Marketing was in motion.
They were investing in their
marketing, but there was nobody who
was quarterbacking what was happening.
They didn't have a CMO type person helping
orchestrate and give strategic direction.
And so we worked with them to
implement a strategic framework
and structure and I mean, they saw.
Over a hundred percent increase in
their web traffic and saw a 300 plus
increase in qualified prospects.
And so it wasn't so much because the
budget changed, it was because we were
able to work with them and help pull
in their different team members and
the different partners that they were
already working with to be more strategic
with what they were already investing.
AnnieLaurie: Okay.
One more area I wanna make sure we hit.
do you know if the budget
is actually working?
What are you measuring?
Steve: Ultimately, you're
measuring against sales outcomes,
revenue, not just activity.
AnnieLaurie: Metrics.
Steve: Yes, yes.
And they, they have their place.
But at the end of the day, it, especially
for B2B, it's gotta be translated
into is this generating appointments?
Is this generating qualified leads
who are turning into customers?
And again, especially in the B2B space
branding makes sense for some retail
or for certain types of businesses.
But for B2B, almost every.
Part of your marketing budget, you
want to have a direct correlation
to what the revenue outcome is.
And so, you know, publishing articles,
getting impressions, again, those
things are important, but you wanna
make sure that you're tracking
what you're actually getting from
your marketing and investment.
And so that's gonna be, so let me,
let me give a quick run through
of, of metrics that matter.
You want to pay attention to where
is your website traffic coming from?
And think about this in
terms of the journey.
How are people getting to your website?
Where are your leads coming from?
Whether you have inbound and outbound
activities, your sales team, et cetera.
You want all of your inputs
being tracked, and then you
wanna know your conversion rate.
What percentage of those folks,
whether they're coming in from your
website, again, they're coming from
prospecting activities, they're
coming in from strategic partners.
What's the conversion rate to a lead?
And again, there's different
internal definitions of how you're
qualifying a lead, whether you're
using m qls, SQLs, things like that.
But are those inputs, those, the
traffic, is it turning into real
conversations and knowing what those
conversion rates are by channel?
If you're running paid ads, what
percentage you're turning into
appointments and ultimately into
revenue if they're coming in
through organic, if they're coming
in through prospecting activities.
You want to know that information.
Looking at your cost per qualified
lead, what does it cost to
generate a real opportunity?
And, and specifically from the marketing
side, those sales opportunities being
generated by marketing and revenue
that's influenced by marketing activity,
AnnieLaurie: We did a deep
dive into this in episode 15.
We did a
Steve: I.
AnnieLaurie: talk on vanity metrics and
all the ins and outs there, so if anyone
wants to go back and listen to that,
that might be a useful, useful piece of
information to add to your next play.
This next list.
Steve: Yeah, that, that,
that is absolutely a great
episode to follow up with.
And, and the test is simple.
Can you tie that number to revenue?
And if not, again, it could be vanity.
It's not that it's not
useful at some place.
But from the CEO's perspective,
what's driving leads?
What's driving revenue?
AnnieLaurie: And it might not be vanity.
It might just need to be optimized and
it might just need another fresh set
of strategic eyes, which maybe will.
Maybe that'll be the follow up
to the Vanity Metrics Podcast.
Maybe if it's not vanity, could it be?
You might just need to optimize.
So this is coming from the
content strategist, so I'm not
gonna take us on a rabbit trail.
Let me land the plane.
All right.
What's the one thing you want people
to walk away with from this episode?
Steve: Let's say let your
budget follow strategy as
opposed to the other way around.
Obviously, you can have a range.
I mean, you, you know, especially
if you have a CFO, they want to
know what's the budget and, and
have intentionality around that.
But don't just start with a number, then
try to figure out what to do with it.
Flip it.
Figure out what, what are your
growth goals and what's gonna
be required to get there from a
marketing investment perspective?
Well, that also means that one,
you need to identify the gap.
How many new customers do you
ultimately need to bring in to
fig to, to hit that revenue goal?
And that gap is between not only where
you are, where, where you want to go, but.
What's the gap if you don't add
marketing because you have sales,
you have salespeople, so you're
gonna get some percentage of that
increase just based on their activity.
But what's the gap between what
they're doing and where you're trying
to go, that marketing needs to fill?
How many customers is that?
How much revenue is that?
And then build your strategy.
When you know how many customers
you're trying to get, you've gotta
then back into, well, what's the
activity that we need to get there?
And that make, yeah, again, we,
we start getting into strategies.
I won't, I won't chase down that trail,
but if you have a budget without a
strategy, you've got a list of expenses.
But when you have a budget that's built
around clear strategy that's tied to your
specific goals, you have a growth plan.
And that distinction really separates
companies that see results, meaningful
results from the ones that just keep
wondering why marketing's not working.
AnnieLaurie: And I think that's what
I love so much about this idea of a
marketing partner and not a order taker.
A strategic marketing partner matters so
much because having someone help you think
through the strategy before you spend
money and maybe regret spending the money.
Like having that expertise, having that
person, that voice on your team that
you trust, it makes a huge difference.
Steve: It, it really does.
And, and whether.
If you are wanting to keep your marketing
in-house and have a CMO or a coach,
or whether you want to outsource your
marketing, having a partner who can help
you figure these things out becomes.
Critical.
And that's, that's part
of what we do here.
That's, that's what we do.
Not just part of, that's
what we do here at Wayfind.
We work with companies.
We have some who outsource
their marketing to us.
So we function as their outsource
marketing partners, their
agency, and we have others who
they want to keep it in-house.
And so we can serve in that
CMO marketing coach type role.
And, and sometimes there's even
a combination between those two.
And so if this is something that
you're interested in, you know, we
would love to have a conversation.
Because the first conversation is always
about where are you trying to go, and
then budget naturally follows from there.
AnnieLaurie: So three things to take away.
Number one, your marketing investment
should be between three and 10% of revenue
mapped to your specific growth goals.
two, it's not one number.
It's a system across five categories
and balance really matters there.
Three.
And finally, budget.
Follow strategy.
you're building the budget
first, flip the order.
Steve: And if you're trying to
figure out what that looks like for
your company specifically, the best
place to start is a conversation.
You can reach out to us through our
website, start a conversation, and
we can take a look at where you are,
where you're trying to go and help you
build a marketing system based on our
guide framework and help you figure
out which budget makes sense for you.
At your stage, it's not a
pitch, it's a conversation.
AnnieLaurie: And you can schedule that
conversation at way, find marketing.com,
click on discuss your Marketing,
and we will be in touch.
And if you're not sure where your
marketing stands right now, maybe you're
not ready to have a conversation, check
out our free Guide Marketing assessment.
Also right there at
the top of our website.
You can't miss it.
It takes about five minutes.
work through a series of questions
that will give you a clear
picture of what's working and
what's not with your marketing.
So you can check that out
again at wayfindmarketing.com.
Steve: And if you found this episode
useful and helpful, please share it
with another CEO or business owner.
Share it with somebody in your
Vistage group who might be
wrestling with this same question.
This is one of those episodes that tends
to land for folks who are at a decision
point in their business specifically.
We need marketing.
So how are we gonna do that?
AnnieLaurie: Thank you for listening to
the Growth Minded Marketing podcast today.
I'm Annie Laurie Walters.
Steve: And I'm Steve Phipps.
Remember to subscribe and
we'll see you next time.