A sales budget is a tool used by businesses to plan and track their sales activities and revenue. It is typically created on a monthly or quarterly basis, and includes detailed information on the expected sales volume, sales prices, sales mix, and expected sales revenue.
However, despite all the yearly planning, studies show that sales and marketing teams waste $2 trillion annually on excess sales, lost revenue potential , general, and administrative costs. Unfortunately, this doesn’t help sales managers justify their budget needs and present their cases to the top management.
Because we know how overwhelming it can feel to create a comprehensive sales budget from scratch, we have put together this helpful guide on how to plan an effective budget for next year’s LinkedIn lead generation success.
After reading this post, you will understand:
Building an effective strategy that keeps your organization growing starts with a plan — and don’t forget the money to run it. However, creating a sales budgets isn’t just as easy as adding the expected sales revenue for the year. That’s why we’ve prepared a granular approach that breaks down your sales and marketing spend.
As the sales team manager, you need to think about where you are now, what comes next and how you can make sure your lead-generation efforts continue to drive desirable results.
Here’s how to plan for a yearly sales budget:
Income statements summarize the company’s overall performance because, after all, it is not advisable to spend money that you don’t have.
The company’s balance sheet outlines how much equity and assets the company has against its liabilities (debts and loans) in a set time period. Next, fetch the year’s cash flow statements to understand how much streamed into the company from its sales activities against how much you spent to realize your sales quota.
Remember, these financial documents should be dated for the current year.
There are several approaches to calculating sales budgets. For instance, you can calculate it as a percentage of the total revenue. Where you have several products or services in your pipeline, you can calculate the sales budget by channel/product/service. That involves taking count of your products, inventory, and prices.
While at it, account for any changes that may be implemented in the coming year. Are you raising prices or lowering them in the coming year? Will you end some services or update any features? Take such changes into account since they directly affect your sales budget estimate.
The time period, in your case, will depend on what products and services you sell. High-value offerings usually have an annual, biannual, or monthly time budget. On the other hand, a monthly budget will suffice for low-priced offerings. Seasonal products will also benefit from a monthly or quarterly period.
While there’s no specific time period that fits all, it’s best to avoid an unnecessarily long time period to avoid inaccurate results.
A quick look into past sales data provides insights into what to expect in the coming period. Look out for emerging trends, as these help create a more accurate prediction for the coming year. But don’t stop there.
Competitors in your industry have their sales budget prediction data which you can tap into to make your predictions even more accurate.
By the way, it helps to keep track of the current market trends because these will affect your sales budget estimate. How are other businesses responding to the current trends? Are they shifting to digital systems for collaboration amidst a global pandemic? Perhaps your company could benefit from that.
Either way, keep these changes in mind to get more refined results.
Now you have all you need to create an accurate budget that reflects every possible outcome. You should be able to create a budget plan that details the expected revenues from the sale of goods and services.
Other important things to keep in mind:
Implementing constant updates requires smooth collaboration with other departments in the company.
A lot goes into running a successful campaign, and as promised, here are the key spending areas you’ll need to keep an eye on:
Fixed costs are costs that don’t change and are incurred regardless of the company’s sales volume. Such costs include:
Sales teams incur short-term and long-term fixed costs that should be accounted for when calculating the net sales prediction for the coming year.
Variable expenses change with the sales volume output, i.e., a rise in the sales volume leads to a corresponding rise in the variable costs. Some variable costs include:
Variable expenses are considered short-term costs since they can be easily altered when needed. For instance, the company may cut off bonus commissions for the sales team when losses are incurred.
Other expenses incurred by sales teams have been broken down by activity (if relevant) and estimated cost as follows:
There are more costs involved based on your company and the nature of its activities. Be sure to identify all the expenses incurred to get an accurate prediction.
There’s no doubt that LinkedIn is an invaluable lead generation tool, with 80% of marketers affirming that the platform is an effective lead generation tool for lead generation. Additionally, 80% of B2B leads coming from social media arrive from LinkedIn.
But how much actually goes into a LinkedIn lead generation campaign? Generally, it costs $40 to $190 to generate a B2B lead. Of course, this amount varies by industry, with lead acquisition costs exceeding $200 in the technology space. If you’re considering a paid LinkedIn ad campaign, you should expect to spend between $1000 and $5000 per month.
Here’s what you need to know to create a sales and marketing budget plan for LinkedIn lead generation:
Each LinkedIn lead generation campaign should be based on a clear goal, whether that is:
Setting clear goals means you can more effectively allocate your resources to successful campaigns.
How much are you willing to spend on lead generation? It’s obvious that most sales and marketing teams don’t have all the money they need to accomplish every activity on their list.
Consider setting a reasonable lifetime budget that can be justified by the sales activities on your list. A lifetime budget refers to the amount of money you wish to spend throughout the length of your campaign. Consider splitting your budget between the campaign’s objectives.
Your key performance indicators should be based on the main goal of the campaign. For instance, an awareness campaign can be measured by click-through rates (CTR). Similarly, a justified lead generation campaign should be backed by increased conversion rates, lower cost per lead, increased qualified lead volume, increased booked meetings, and so on.
Be careful not to fall into the vanity metrics trap. Vanity metrics, such as the number of followers and unique visitors, do not show a true representation of your campaign’s performance.
Now that you know what you want to achieve, how you want to achieve it, and how you’re going to measure your success, you can finally create an informed LinkedIn lead generation plan.
The rise of LinkedIn as a powerful B2B lead generation platform has created new opportunities for businesses to reach their target audiences. However, with the increased competition on the site, it’s important to be strategic about how you spend your LinkedIn lead generation budget.
Here are the steps to optimize your LinkedIn lead gen budget so that you’re getting the most bang for your buck:
Again, every budget should be based on clear objectives, whether that means building awareness or increasing website traffic.
Another thing to consider when setting up your objectives is the size of your target audience. Ideally, you want to target a small group of people who would be best suited to your product/service. Segmenting your audience into smaller, relevant groups maximizes your campaign’s efficiency.
The second step to optimization is targeting. And when it comes to targeting on LinkedIn, you should have a clear picture of who your target audience is. That also means their specific pain points, what companies they work for, what groups they’re a part of, and more.
Once you know who your ideal customer is, you can create content and ads that speak directly to them. You can also use LinkedIn’s targeting options to make sure that your content and ads are only being served to people who are likely to be interested in what you have to say.
A multi-pronged approach means using a combination of free and paid solutions to reach your desired results. For example, you might use organic posts and Sponsored Content to promote a piece of gated content like an eBook or white paper. By using both organic and paid solutions, you can reach more people while also maximizing the conversion rate of your content offers.
If you want people to take notice of your brand on LinkedIn – and eventually convert into leads – you need to create compelling content that speaks to their specific needs. Here’s the thing: generic content doesn’t work on LinkedIn. You need to create content that’s targeted, helpful, and relevant if you want key decision-makers to engage with it.
The only way to know what’s working and what’s not is by testing different content types, outreach formats, target audiences, and more. Then, once you’ve found what works best for your business, double down on those efforts and continue testing so that you can continue fine-tuning your strategy over time.
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As the new year approaches, now is the time to start planning for your LinkedIn lead generation success. One of the best ways to do this is to review your successes and failures from the past year. What worked well? What didn’t work so well? Use this information to make adjustments to your sales and marketing budget plan and your LinkedIn strategy for the coming year.