Is your digital sales budget aligned with customer journey in 2024?

Navigate budgeting in economic uncertainty

In the current landscape of economic unpredictability, smart budgeting has become an essential tool for business success. 

For SMB B2B or B2C, a healthy marketing budget (not including headcount) should be somewhere between 2% and 10% of their revenue.

Recent insights from the Gartner CMO Spend and Strategy Survey 2023 indicate that 2023 marketing budgets account on average for 9.1 % of total company revenue (image above). Despite this allocation, a McKinsey survey revealed that only 50 % of the CFOs believe marketing can effectively drive growth.

In this article, we look at optimizing budgets in alignment with the most lucrative customer journeys to ensure that each euro spent contributes directly to growth and ROI.

 

A smarter approach to budget analysis

Annual planning is the bedrock for digital sales success. By mapping out your digital sales goals, and understanding your target market and your key target audiences, you lay a strong foundation for growth. 

For marketing and digital sales leaders, it’s crucial to scrutinize the previous year’s spending on different channels, media types, and key customer segments. This analysis can reveal inefficient spend allowing for more effective budget reallocation.

A common cost savings tactic is an across-the-board spend reduction, such as uniformly cutting 10 % from each marketing channel. However, there may be more effective approaches than this strategy. In contrast, a more effective strategy is aligning digital sales spending with the customer journey touchpoints that are the most impactful in driving sales.

 

Embrace customer journey for long-term growth

Adopting a customer journey approach means looking at digital sales performance across the entire customer journey. This strategy combines the power of marketing and digital sales, supported by integrated teams, measurement systems, and KPIs.

It’s about understanding what resonates with your chosen key target audience and which stages of their customer journey generate the most impact.

• Map out your key customer segments and identify areas that can hinder a seamless customer experience. 
• You should allocate the budget to the key stages of the customer journey according to your specific digital sales strategy and key target customers for the best sales impact.
• Investments in awareness and consideration stages often focus on broad-reaching activities like content marketing, SEO, and social media.
• In the decision and loyalty stages, budgets might be more focused on targeted campaigns, email marketing, retargeting, customer relationship management, sales activities, and loyalty programs.

According to the Gartner 2023 Marketing Budget Report, more than half of channel spend is currently allocated to consideration and conversion (see image below).

 

How to maximize digital sales budget efficiency:

1) Team alignment

Investigate if your internal resources are driving the customer journey optimally. The end-to-end revenue process requires close alignment between marketing and sales. Establish a shared set of metrics and clear rules of engagement to create a more comprehensive understanding of key target audiences and their customer journeys. This digital sales alignment ensures the best use of the budget.

• Utilize data analytics to understand where potential customers drop off in the customer journey and allocate budgets and team resources to address these gaps.
• Analyse customer behaviour and conversion data to determine which channels and touchpoints are most effective, and adjust both budget and team resourcing accordingly.
• Hire outsourced digital sales experts to fast-track improvements in digital sales processes and talent development to achieve results faster.

 

2) Personalization & AI

Leverage personalization and integrate generative AI solutions into the digital sales strategy to automate content creation and data analysis, enhancing campaign effectiveness.

• Personalized messaging is about understanding your target audience’s preferences, behaviours and challenges.  
• Dynamic segmentation helps to categorize your audience based on various criteria such as demographics, behaviour and preferences to tailor your campaigns to each segment’s unique characteristics.
• Choose the most effective channels to ensure your message reaches your audience in the right context.

 

3) The right digital sales tech stack

Gartner’s 2023 survey highlights that many digital sales teams utilize only a fraction of their tech stack capabilities, leading to significant resource wastage. Optimize technology costs by focusing on tools that deliver measurable ROI and align with the customer journey.

• Invest in marketing automation tools to streamline the customer journey, making digital sales efforts more efficient and effective.
• Invest in technologies and tools that allow for personalized marketing that can significantly enhance the effectiveness of the customer journey.
• Budgets allocated to CRM systems, automation software, and AI-driven analytics tools can help in nurturing leads and enhancing customer experiences.

As we enter 2024, aligning your digital sales spend with customer journey touchpoints is essential. At Junko, we help optimize budgets for maximum impact enabling you to achieve more with less. Contact Junko today to discover how we can support your digital sales processes.