Assess Funnel-Stage Strategies to Maximize Marketing Spend

Each stage of the marketing funnel is important, but not every company shares the same goals for each stage. Carefully evaluating how tactics are used throughout the marketing funnel can reveal better ways to spend your marketing dollars. At the end of the day, your goal should be to budget efficiently for every funnel stage while creating a better customer experience.

Challenges To Overcome When Budgeting 

There are a few important challenges to review before properly allocating your budget.

Challenge: determine the total marketing budget. Marketing spending varies across industries for many reasons, so it’s helpful to use gross revenue as a guide. HubSpot reports, “The U.S. Small Business Administration recommends small businesses (businesses with revenue less than 5 million) allocate between 7% and 8% of total revenue to marketing.” But depending on the age of your business, even 5% could be appropriate to get started.

From there, determine how much of that percentage will go toward digital marketing. More companies invested in digital strategies (such as web optimization and digital media and search) as opposed to traditional marketing (like event marketing) in 2021, so if digital hasn’t played a big role in your marketing efforts before, it should now.

Challenge: not having clear campaign goals. Does your next campaign need to create awareness, solidify brand loyalty, or generate revenue? Realistically, businesses need all three, but prioritizing one or two goals creates a better focus for campaign planning and makes it easier to decide how to allocate your budget.

Priority goals will likely evolve as your business becomes more established. Jamie Ceman of Chapman University told Forbes, “[M]y organization is building a national reputation, so we spend over 50% of our ad budget on awareness and another 20% on direct lead-gen efforts.”

Challenge: citing strengths and weaknesses. Which of your past campaigns met the most KPIs? Which channels consistently deliver better leads or conversions, and which ones never quite work out? Inevitably, some channels and strategies won’t work, even if they’re “supposed to.” Audiences change and digital tactics are ever-evolving. Recognize when to cut your losses and reallocate funds to better-performing channels.

Budget Allocation Across Stages and Channels

Marketing spend varies by an organization’s size, age, industry, and product or service offerings. With this many variables, there isn’t necessarily a standard way to allocate marketing budgets.

For instance, newer businesses must create brand awareness in addition to driving sales. Without brand awareness, no one will purchase from the business; without sales, the business can’t afford to spend on marketing. But although acquiring customers often costs more than retaining them, devoting budget to top-of-funnel awareness tactics can lead to greater bottom-of-funnel conversions in the long run.

In cases like this, referring to industry benchmarks can offer strategic guidance, especially when paired with your business’s past performance data and projections for the upcoming year.

Whatever your industry, an omnichannel strategy will cover the most ground. Some of the recommended full-funnel marketing tactics for each stage of the buyer’s journey include:

• Awareness: SEM, social media ads, display ads, pre-roll ads, CTV, native ads
• Consideration: email, retargeting, social media ads, native ads
• Decision: email, retargeting, paid search, knowledge bases

You may not need to use every channel or platform to find campaign success. Before committing, estimate ROI for each channel. Industry benchmarks and past performance data provide some guidance, but so does the 70-20-10 model:

• 70% of digital strategy consists of tried-and-true methods
• 20% is moderate risk yet demonstrates audience appeal
• 10% isn’t a guaranteed win but is worth trying, like a new social media platform

What Smarter Budgeting Can Do for Strategy

Not every prospective customer will move through the awareness, consideration, and decision stages in a straight path. Some people require more time to research and compare options while others are interested in learning a company’s standards and practices before purchasing. Full-funnel marketing helps businesses capture audience attention at almost any point in a given stage.

Clear campaign goals make it easier to monitor KPIs and adjust the budget accordingly. Consider some of these stage-specific KPIs:

• Awareness: click-through rate on PPC ads; social media ad engagement
• Consideration: landing page activity (bounce rate, page views, pages per session, etc.); email signups; email open rates
• Decision: conversion rate; total sales; cost per conversion

Interconnected KPIs can help you identify campaign strengths and weaknesses. Where are potential customers experiencing bottlenecks or dropping off? Are certain stages taking longer than expected? Monitoring campaign performance through this lens clears the way for a smoother budgeting process in the future.

Ultimately, the big-picture goal with any campaign is generating growth your company can sustain. Full-funnel marketing with strategic budgeting offers more efficient spending for the team, more effective messaging, and a better experience for prospective customers.