Are You Investing Too Much in Branding?

One of the first duties of an interim marketing executive starting a new engagement is to assess the marketing budget.  How much is being spent on what activities and what is the expected result?

Within the marketing programs budget there should be three categories of investment: Environmental, Lead Generation and Channel Readiness.  Research has shown clearly that B2B companies that invest at least 42% of their budget on Lead Generation grow revenue faster than companies in their industry that spend less than that level.

The definitions are straight-forward.

Environmental programs are for branding and letting  the market know your company is in a particular category.

Lead Generation are programs that place buyers into the funnel.

Channel Readiness programs are those that make the direct and in-direct sales channel effective.

The research (1400 companies around the world) didn’t reveal any patterns in the sample for spending in the Environmental and Channel Readiness categories, but it was clear that spending too much in Environmental or Channel Readiness at the expense of Lead Generation was harmful to revenue growth.

Before making changes to a marketing budget the smart interim marketing executive will first assess for each product the stage of the market (per Geoffrey Moore), what the appropriate go-to-market strategy is for each market, and then what percentage of budget should be allocated to environmental, channel readiness, or lead generation activities to support that go-to-market strategy.

Take a look. Are you spending less than 42% of your marketing programs budget on lead generation? If so, this is probably restricting your revenue growth.

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