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The Secret to Budgeting Your Demand Gen Plan | Part 1

The Secret to Budgeting Your Demand Gen Plan | Part 1

When embarking on a demand generation (demand gen) journey, understanding how to allocate your budget efforts effectively is crucial. Throughout my journey as a consultant over the last three years, I have encountered numerous questions about this very subject. Below, I share my approach to solving this key challenge.

Identify the Business Goal

Before diving into budget allocation, it's imperative to identify the core business goal. Ask yourself:

  • What was marketing hired to do?
    • Was it to drive net new logos?
    • Increase MQL (Marketing Qualified Lead) to SQL (Sales Qualified Lead) conversion rates?
    • Improve retention percentages?

Understanding the primary objective provides a foundation upon which to build your plan.

Analyze Business Metrics

After pinpointing your business goal, conduct an in-depth analysis of relevant business metrics. This evaluation should include:

  • Total marketing spend
  • MQLs
  • SQLs
  • Sales Qualified Leads (SQL)
  • Closed-won data
  • Closed-lost data

This comprehensive review will help reveal gaps in your current foundation, enabling you to form a justifiable hypothesis for the next investment steps.

Bridging the Gap

The data gathered from your analysis will open your eyes to any discrepancies or deficiencies in your strategy. This insight is vital for formulating a hypothesis that justifies further investment and directs your budget efforts more effectively.

Keywords

  • Demand Generation (Demand Gen)
  • Business Goal
  • Marketing Qualified Lead (MQL)
  • Sales Qualified Lead (SQL)
  • Closed-Won Data
  • Closed-Lost Data
  • Budget Allocation
  • Marketing Analysis

FAQ

Q: What is the first step in creating a demand gen plan? A: The first step is to identify the primary business goal for which marketing was hired, such as driving new logos, improving MQL to SQL conversion rates, or increasing retention percentages.

Q: Why is it important to analyze business metrics? A: Analyzing business metrics provides insight into current spending and performance, revealing gaps that need to be addressed and helping to form a justifiable hypothesis for future investments.

Q: What metrics should be examined in the analysis? A: Key metrics to examine include total marketing spend, MQLs, SQLs, closed-won data, and closed-lost data.

Q: How does identifying gaps help in budget allocation? A: Identifying gaps in your current strategy helps in directing where investment should be made, ensuring that resources are allocated to areas that will have the most impact on achieving your business goals.

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