What’s Your Strategy for Managing Marketing Budgets?
Unlock the secrets to maximizing your marketing budget with insights from top industry experts. Lifecycle Marketing Consultants and founders share their proven tactics to help you achieve the best ROI. The first insight reveals how to reverse-engineer ROI for each channel, while the final tip emphasizes setting clear priorities and monitoring performance. Discover a total of twelve invaluable strategies to optimize your marketing spend.
- Reverse-Engineer ROI for Each Channel
- Experiment with Small Budget Allocations
- Focus on Data-Driven Allocation
- Use Zero-Based Budgeting Approach
- Allocate Budget for Test-and-Learn Campaigns
- Segment Budget by Customer Lifetime Value
- Adopt a DIY Approach Where Possible
- Implement the 70-20-10 Rule
- Align Budget with Campaign Objectives
- Start Small, Scale Smart
- Set Clear Priorities and Monitor Performance
- Apply the Pareto Principle in Budgeting
Reverse-Engineer ROI for Each Channel
I completely disbelieve in arbitrage-percentage allocation. I reverse-engineer every channel and campaign for its ROI. Mapping my marketing goals to these mini-funnels allows me to allocate my budgets. For example, if I have the goal to generate MQLs through lead magnets, I calculate the cost per lead on different channels and then work towards this goal.
Sascha Hoffmann
Lifecycle Marketing Consultant, SH Media
Experiment with Small Budget Allocations
One way that budgeting works is that there is a certain limit within which we can experiment with different channels and strategies before delving deeper into a larger budget for the project. After this allocation is done, we spend a small portion of resources conducting A/B tests to assess various avenues—social media, email marketing, paid advertising, etc.—to establish the most effective communication channel to the customer.
When the feedback is received, and the channels and messages are statistically found to be most effective, the budget is then transferred to these effective channels. This is done so that we do not pump more resources into ineffective strategies; however, we strategize to ensure that maximum gains are made on those that have evidenced success. It also enables us to avoid resources running out since we can control our rates according to how the strategy is performing in terms of meeting the set goals.
Khurram Mir
Founder and Chief Marketing Officer, Kualitatem Inc
Focus on Data-Driven Allocation
One budgeting tactic we’ve found effective is focusing on data-driven allocation while maximizing the use of owned media. By regularly monitoring the performance of various marketing channels—whether paid ads, content marketing, or social media—we identify which areas yield the highest return on investment (ROI) and reallocate budget accordingly.
Additionally, leveraging our owned media, such as our website, blog, social media, and email list, allows us to amplify our message without incurring extra costs. This dynamic approach ensures that every marketing dollar is used efficiently, maximizing both our reach and the impact of our owned media while keeping paid spend optimized.
Jamie Frew
CEO, Carepatron
Use Zero-Based Budgeting Approach
I’ve found that using a zero-based-budgeting approach is a game-changer for optimizing our marketing spend. With this tactic, every dollar we allocate has a specific purpose, ensuring that we’re not just spending based on previous budgets, but strategically assessing our current needs and goals.
At the start of each budgeting period, we evaluate our marketing objectives and determine the costs required to achieve them from scratch. For instance, if we plan to launch a new social media campaign, we look at the potential return on investment, analyze past performance, and decide exactly how much we should invest in ads, content creation, and influencer partnerships.
This method helps us focus on the initiatives that drive the most value. For example, last year, we dedicated funds to collaborate with micro-influencers who aligned with our brand, resulting in higher engagement and sales than expected. Justifying every expense based on current priorities and projected outcomes maximizes our marketing effectiveness and ensures we’re making the most of our budget. It’s all about being intentional with our resources and adapting to what truly works for our audience!
Danielle Hu
Founder, The Wanderlover
Allocate Budget for Test-and-Learn Campaigns
One budgeting tactic that has helped us optimize our marketing spend is allocating a portion of the budget to “test-and-learn” campaigns. Rather than committing the entire marketing budget to large, pre-planned initiatives, we reserve a specific percentage—typically around 10-15%—for experimenting with new strategies, platforms, or audience segments. This approach allows us to test different ideas on a smaller scale before deciding whether to allocate more resources.
For example, we might run a pilot campaign on a new social media platform or test a different type of ad creative to see how it performs. By closely monitoring the ROI of these smaller tests, we can quickly determine what’s working and what isn’t without risking a significant portion of the budget. If a test shows promising results, we can then scale it up, confident that it will deliver a strong return.
This tactic gives us the flexibility to stay agile in our marketing efforts and capitalize on new opportunities as they arise, while also minimizing the risk of overspending on unproven tactics. It ensures that our larger budget allocations are driven by data and performance, helping us maximize the overall effectiveness of our marketing spend.
Sandra Stoughton
Director, Marketing Operations, TruBridge
Segment Budget by Customer Lifetime Value
Our favorite budgeting tactic is allocating budget based on customer lifetime value (LTV) segments. For example, we don’t allocate all our budget equally across the three customer segments.
We calculate the LTV of existing customers with our historical data and then analyze the channels and the spend. The segments that tend to stay with us the longest, and whose LTV constantly grows, get the biggest portion of our marketing budget. Then, for our medium-LTV and low-LTV customers, we tend to focus on organic channels or cheaper outreach methods.
Lana Rafaela Cindric
Sales Growth Associate, RevBoss
Adopt a DIY Approach Where Possible
One effective budgeting tactic to optimize marketing spend is to take a DIY approach wherever possible. This means handling tasks like backlink-building by making HARO submissions manually and writing articles to target key keywords on my website. By doing this, I can significantly reduce costs associated with hiring outside help.
Another useful strategy is automating social media posts. I create scripts that schedule and post content regularly on Twitter for my business. This not only saves time but also keeps my audience engaged without the constant need for manual input.
For tasks that are too technical or time-consuming, I opt to outsource those specific areas. This approach allows me to focus on the more strategic elements of my marketing while ensuring that the technical aspects are handled efficiently. Balancing DIY efforts with targeted outsourcing helps me get the most value from my marketing budget.
Ramzy Humsi
Founder & CEO, Vortex Ranker
Implement the 70-20-10 Rule
One effective budgeting tactic to optimize your marketing spend is implementing the 70-20-10 rule. Allocate 70% of your budget to proven marketing channels that consistently deliver results, such as your core advertising platforms. Then, use 20% on emerging or experimental channels that show promise but aren’t fully tested yet.
Finally, allocate 10% to high-risk and high-reward opportunities that could drive significant returns if they work. This strategy ensures you are maintaining a steady flow from reliable sources while exploring new avenues for growth without overspending. It is a balance of stability and innovation.
Ronald Osborne
Founder, Ronald Osborne Business Coach
Align Budget with Campaign Objectives
As the owner of an SEO agency, one effective budgeting tactic I’ve implemented to optimize marketing spend is adopting an objective-based budgeting approach. This method involves aligning the marketing budget with specific campaign goals rather than relying on historical spending patterns or arbitrary percentages of revenue.
By clearly defining objectives—such as increasing brand awareness, generating leads, or boosting sales—we can allocate resources more strategically. For instance, if the goal is to enhance online visibility, a larger portion of the budget can be directed toward SEO and content-marketing initiatives that have proven effective in driving organic traffic.
The impact of this approach has been significant. By focusing our budget on targeted objectives, we’ve seen improved ROI across various campaigns, as funds are allocated to initiatives that directly support our goals. This method also encourages ongoing evaluation of each campaign’s performance, allowing us to adjust allocations based on real-time data and results. My advice to others is to regularly revisit your objectives and ensure that your budget reflects the most pressing needs of your business.
Greg Walters
Co-Founder, SEO Modify
Start Small, Scale Smart
One of my top budgeting hacks? Start small, scale smart. Instead of dropping a big chunk of your budget up front, allocate a fraction to test various channels, creatives, and messages. It’s like setting up a few controlled experiments. You get quick data, see what’s actually working, and then pour more money into the winners.
I did this for a SaaS campaign once—ran tiny tests across Google, Facebook, and LinkedIn. Google was eating up the budget with barely a click. LinkedIn? Cheaper, better engagement, more qualified leads. We scaled that, killed the rest, and the ROI spoke for itself.
It’s all about staying flexible and not being a slave to assumptions. You can optimize your spend without the risk of burning cash on something that tanks.
Thomas Moussafer
Co-Founder, Jimo
Set Clear Priorities and Monitor Performance
We set clear priorities to optimize marketing spend. Instead of spreading the budget across multiple channels, I focus on what brings the best returns. For example, if social media ads perform well, I allocate more funds and reduce spending elsewhere.
I use tools that allow me to monitor campaigns as they run to quickly pull the plug on anything that’s underperforming. It’s a simple way to prevent waste and reallocate those dollars to better efforts. No guessing, just facts.
Another useful approach is experimenting with small budgets first. Before investing a big chunk of money in something new, I run small-scale tests. This helps me gauge potential success without overcommitting. If it works, great. If not, there is no big loss.
Marketing trends shift, and so do opportunities. Keeping some budget unallocated allows me to jump on new ideas or opportunities as they arise without stretching the budget thin elsewhere.
Kate Donskaia
Marketing Manager, WealthProtector
Apply the Pareto Principle in Budgeting
Apply the Pareto principle, known as the 80/20 rule, whereby the maximum spend on marketing can be optimized by targeting what generates 80% of the results of what’s desired with only 20% of the effort. You might direct more of your budget toward the most efficient campaigns, channels, or audience groups that generated the highest returns through the analysis of historical performance data.
For example, if you conclude that you have the ability to yield the greatest ROI by leveraging social media ads or email marketing, this means that you will be able to spend more money on such channels while spending fewer marketing dollars on the channels that do not give good returns. In such a way, you target the best return while seeing to it that your marketing investment is focused and strategic rather than spread over too many areas.
It continues to monitor the campaign’s performance, so one can make real-time budget adjustments to make sure that money is spent on the right thing that works best. That way, there will be a concentrated use of marketing spend to focus on high-impact activities that have a sound footing based on data to support sustainable growth.
Dan Steiner
Co-Founder, Good Laundry
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