Do the Maths Add Up? Setting a B2B Sales and Marketing Budget

The Sales and Marketing budget is a subject of heated debate and controversy for many businesses, whether start-ups or large corporates.

If they are to grow and develop every business needs to make sales and marketing investments. These take many different forms; the investment may range from a small business owner allocating time to attend industry networking events, to bigger businesses deploying complex large budget advertising with integrated multi-channel marketing campaigns. Some of these investments are clearly quantifiable as a cost, other – time in particular – less so.

The key is to make these sales and marketing investments wisely. Each element of the budget should support the overall strategy, and once the infrastructure is in place the return achieved from each type of marketing activity should be carefully monitored. In this way the budget can be justified and continuous improvements made to its effectiveness.


How much to spend on marketing?

Generally a business will allocate a percentage of their turnover to spend on marketing. The amount chosen to allocate will vary across businesses and industry sector, with profit margin, size of business, culture and ambition all having an impact on the size of budget.

Marketing budgets are often under pressure and can be seen as a target for cost savings if the business comes under pressure. It has been traditionally accepted though that most businesses should allocate between 5% and 10% of their total revenues to marketing if they operate in a fairly static environment.

Naturally businesses that are actively pursuing a growth strategy will usually allocate more. Some Small Business Associations recommend that during the early years a business should spend much more; up to 20% of turnover in some cases to help build their brand and reputation.


How should you spend your marketing budget?

Buyers these days are less inclined to meet with a salesperson in the early stages of their evaluation to find out what is available to them and whether it might fit their needs. Research published in the Harvard Business Review has shown that B2B buyers do not typically interact with the sales function until they are 50- 60% of the way through their purchase evaluation.

Marketing therefore need to communicate with buyers for a longer period of time than in years gone by, as the point at which the lead is handed over to sales is now later in the buying process.

Online resources enable buyers to undertake much more of the research themselves, so marketing must create and distribute material to help buyers find the information they are after. Marketing must use lead generation techniques to draw buyers into initial contact with their brand. This needs to be done well to ensure that awareness, knowledge and interest of the buyer increases, and that they then reach the point they are ready to meet with sales.

Modern B2B marketing facilitates this through content and by focussing on the user experience on the website and landing pages to help buyers to find the information they need. Sophisticated solutions like marketing automation can help understand the specific needs of an individual and present them with relevant and personalised messages that progress them further towards being ready to meet with sales.

Marketing communications are important during the sales process, but equally valuable after the sale to reassure buyers that they have made a good buying decision.

Brand advocacy from existing customers and the resulting recommendations and referrals can be a powerful driver of growth in business markets. This can be driven by effective post-sale marketing.

The rapid pace of change in modern marketing presents both challenges and opportunities. Buyers have changed their behaviour, and the consequences for businesses that do not adapt their approach are that they are likely to fall behind their competitors.

The array of new technologies and techniques available to marketers requires broad expertise across a number of disciplines ranging from data analytics and the creation of digital assets to copywriting and the creative talents necessary to create emotionally compelling visual impact. This hybrid approach requires significant investment.

Gartner forecast that by 2017 the Marketing Director is likely to spend more on IT than the IT Director. This may include analytics, call tracking, content management and distribution, marketing automation and social media tools.

To adapt requires investment in skills as well as technology since the technology is only an enabler. The hybrid skills required will increasingly be provided through a blend of both internal and external resource. Agency support will be increasingly important as marketing complexity increases and integration and measurement of multiple channels becomes more and more vital. The fundamental skills of the internal marketer will be co-ordination of resource and budgets, monitoring and analysis of Return on Investment so that they can measure, justify and continuously improve the performance of their campaigns.


What about Sales budgets?

Human interaction with a Sales person is likely to remain important in the latter stages of the process particularly for complex high value solutions. It will also remain an important part of the marketing mix at the early stages, where Telemarketing can help achieve one of marketing’s biggest challenges; to identify relevant decision makers, gain opt-in to marketing communication and to start the process of getting the buyers engaged.

Close alignment between sales and marketing is essential to ensure the buyers experience from start to finish is seamless and that the messages they receive are consistent. This shift in buyer engagement does in many circumstances mean that businesses should shift funds from sales into marketing; a larger proportion of the buying process is managed by marketing, and less by sales.

Forrester research has predicted from their research that in the US by 2020 one million B2B sales roles will disappear because of the shift in buyer behaviour to online research and engagement.

Whether internal or field-based, sales teams are an expensive resource. It is essential however that the level of skill and expertise of sales resource is higher than ever. Sales staff are dealing with better educated and more knowledgeable buyers than ever before.

In smaller businesses it may be that the sales function is dispensed with altogether – those best able to convert the high quality opportunities generated by modern marketing techniques are the directors and business owners themselves.



  1. Sales and Marketing is a strategic investment; businesses that want to achieve significant revenue growth need to plan a realistic budget to achieve this.
  2. B2B buyers have changed. The techniques and channels used to engage with buyers need to change to be successful in the modern era.
  3. Marketing are now often engaged with the prospect for a greater percentage of the buying cycle; sales are engaged less. Therefore budgets need to be allocated accordingly; more allocated to marketing and less to sales.