Want to know how you can calculate your marketing budget? Then read this presentation and at the end you will know how you can calculate your marketing budget

1. How Much You Should
Spend on Marketing
Build your online presence
DATA
DRIVEN
MARKETING
ACADEMY
2021

2. Today's Agenda
By the end of the session, you will...
Understand...
How much your Marketing
Budget Be?
DATA
DRIVEN
MARKETING
ACADEMY
2021

3. Deciding
Marketing
Budget is
Not an Easy
Question to
Answer
DATA
DRIVEN
MARKETING
ACADEMY
2021

4. There are several factors
for deciding Marketing
Budget!
DATA
DRIVEN
MARKETING
ACADEMY
2021

5. Different Sizes of Companies have
Different Marketing Budget
Enterprise have million dollar annual marketing budget
Medium Size Business half a million dollar budget
Small Companies have few thousand dollar budget
DATA
DRIVEN
MARKETING
ACADEMY
2021

6. Regardless of Budget Size we can
generate positive Return On
Investment.
DATA
DRIVEN
MARKETING
ACADEMY
2021

7. Let's get
straight to
today's topic
DATA
DRIVEN
MARKETING
ACADEMY
2021

8. DATA
DRIVEN
MARKETING
ACADEMY
2021
When we ask
so, what's your
marketing
budget?

9. DATA
DRIVEN
MARKETING
ACADEMY
2021
We get pretty strange responses
I don't
really know

10. DATA
DRIVEN
MARKETING
ACADEMY
2021
my budgte is
Rs 5000

11. DATA
DRIVEN
MARKETING
ACADEMY
2021
Can I pay you on
a commission?

12. DATA
DRIVEN
MARKETING
ACADEMY
2021
My budget is unlimited!
Get me the results and
I'll get you the Money!

13. "The businesses who can spend the
most to acquire customers win"
Dan Kennedy
DATA
DRIVEN
MARKETING
ACADEMY
2021

14. DATA
DRIVEN
MARKETING
ACADEMY
2021
So, simply by knowing your
budget you can crush your
competitors

15. DATA
DRIVEN
MARKETING
ACADEMY
2021
Let's calculate Your
Marketing Budget in 4
Simple Steps

16. Determine
Your Average
Order Value
Step #1
DATA
DRIVEN
MARKETING
ACADEMY
2021

17. DATA
DRIVEN
MARKETING
ACADEMY
2021
AVERAGE ORDER VALUE (AOV)
The average price your customer pays
for your service or product.

18. DATA
DRIVEN
MARKETING
ACADEMY
2021
Rs 5k
AOV = Rs 5,000

19. DATA
DRIVEN
MARKETING
ACADEMY
2021
But If You Have Multiple
Products and Services
And have an established company
gather some historical data that gives your
total revenue divided by your total clients

20. DATA
DRIVEN
MARKETING
ACADEMY
2021
If you're a new company,
keep watching to see what you
need to do

21. Determine
Your Life
Time Value
Step #2
DATA
DRIVEN
MARKETING
ACADEMY
2021

22. DATA
DRIVEN
MARKETING
ACADEMY
2021
LIFE TIME VALUE (LTV)
The total amount revenue (or value) you
receive from your customers.

23. DATA
DRIVEN
MARKETING
ACADEMY
2021
Rs 5k
Rs 5k
Rs 5k
Rs 5k
Rs 5k
Rs 5k
Rs 5k
Rs 5k
Rs 5k
Rs 5k
$100
LTV = Rs 50,000
If customer buy's 10 more times from you

24. DATA
DRIVEN
MARKETING
ACADEMY
2021
$100
LTV = AOV x Purchase Frequency
Your Goal Must be to Consistently Increase LTV of
Your Customer Base
So to know your LTV here is simple formula

25. DATA
DRIVEN
MARKETING
ACADEMY
2021
Amazon spends roughly Rs 8,000 to get
single customer
$100
Their Goal is to make you come back and buy again
and again; and they do it with various methods
9

26. DATA
DRIVEN
MARKETING
ACADEMY
2021 Let's take an example of Amazon
$100
Amazon spent Rs 8,000 to get a single customer,
Let's call him Rahul
Data of Rahul - 1) Email 2) Mobile Number 3) Push Notification
Rahul
Rahul
Rahul
Rahul
Rahul
Rahul
Rahul
Rahul
Rahul
Rahul
Place 1st order
Place 2nd order
Place 3rd order
Place 4th order
Place 5th order
Place 6th order
Place 7th order
Place 8th order
Rs 1000
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
visits Amazon
visits Amazon
visits Amazon
visits Amazon
visits Amazon
visits Amazon
visits Amazon
visits Amazon
visits Amazon
visits Amazon
Place 9th order
Place 10th order
CAC
Rs 500
Rs 1500
Rs 1000
Rs 500
Rs 2000
Rs 2000
Rs 1500
Rs 500
Rs 2000
Rs 8,000
Rs -7,500
Rs -6,000
Rs -5,000
Rs -4,500
Rs -2,500
Rs -500
Rs +1000
Rs +1500
Rs +3500
Rs +4500

27. DATA
DRIVEN
MARKETING
ACADEMY
2021
That's How Amazon Does
$100
Amazon spent roughly Rs 8,000 to get a
single customer, as you can see Amazon
did not generated any revenue or profit
just after first order but after few orders
Note: Keep Patience, Marketing Gives Your Results with Time

28. Determine
Your Customer
Acquisition
Cost
Step #3
DATA
DRIVEN
MARKETING
ACADEMY
2021

29. DATA
DRIVEN
MARKETING
ACADEMY
2021
CUSTOMER ACQUISITION COST
aka CAC - the amount of money you are
willing to pay for a customer.
Note: You must calculate all your expenses before deciding CAC

30. DATA
DRIVEN
MARKETING
ACADEMY
2021
If your LTV is Rs 50,000
and your expense is Rs 25,000
(expense i.e. staff salary, rent, utility bills, others)
you want to be 30% more
profitable i.e Rs 15,000
Then your max. CAC is Rs 10,000

31. DATA
DRIVEN
MARKETING
ACADEMY
2021
CAC= LTV x Profit Margin
So the formula is simply...

32. Determine
Your Desired
Return on
Advertising
Spend
Step #4
DATA
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MARKETING
ACADEMY
2021

33. DATA
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MARKETING
ACADEMY
2021
RETURN ON AD SPEND (ROAS)
The multiple on the money you spend
against the money you make

34. DATA
DRIVEN
MARKETING
ACADEMY
2021
Revenue/Conversion Value
Cost
So the formula is simply...
ROAS =

35. DATA
DRIVEN
MARKETING
ACADEMY
2021
You spend Rs 10,000 and make
Rs 15,000
For Example:-
Your ROAS is 1.5x
Rs 15,000
Rs 10,000
1.50 =

36. DATA
DRIVEN
MARKETING
ACADEMY
2021
Your desired ROAS would be 1.25
Rs 8,000 CAC X 1.25 ROAS = Rs 10,000 LTV
You want at least 20% gross profit and your
CAC is Rs 8,000
Note: In most of the cases people target 1.5x ROAS

37. DATA
DRIVEN
MARKETING
ACADEMY
2021
Calculating
Your Marketing Budget
Finally...

38. DATA
DRIVEN
MARKETING
ACADEMY
2021
Set an
ANNUAL MARKETING
BUDGET
It's Recommended

39. DATA
DRIVEN
MARKETING
ACADEMY
2021
You'll have good data and metrices
after an year
By Annual Marketing Budget

40. DATA
DRIVEN
MARKETING
ACADEMY
2021
Review
AOV LTV ROAS
Try to increase
before you decide to make any
changes in annual marketing budget

41. DATA
DRIVEN
MARKETING
ACADEMY
2021
2 Ways
To decide
Annual Marketing Budget

42. DATA
DRIVEN
MARKETING
ACADEMY
2021
Growth
Method
This method is ideal for anyone who is making
under Rs 36,00,000 in annual revenue
We recommend you spend at
least Rs 3,60,000 - Rs 7,20,000 annually
(Rs 30,000 - Rs 60,000 per month) on marketing
and advertising

43. DATA
DRIVEN
MARKETING
ACADEMY
2021
AOV LTV ROAS
Get Data on
Note: Don't try to perfect yet

44. DATA
DRIVEN
MARKETING
ACADEMY
2021
Revenue
Method
This method is ideal for anyone who is making
over Rs 1,00,00,000 in annual revenue
Allocate 10% Revenue to Marketing Cash
i.e Rs 10,00,000 marketing cash you have to
invest

45. DATA
DRIVEN
MARKETING
ACADEMY
2021
CAC = Rs 5000
Example 1:-
Annual Marketing Cash = Rs 10,00,000
= 200 Customers a year
Rs 10,00,000
Rs 5,000

46. DATA
DRIVEN
MARKETING
ACADEMY
2021
CAC = Rs 5000
Example 2:-
Annual Marketing Cash = Rs 3,60,000
Monthly Marketing Cash = Rs 30,000
= 72 Customers a year
72/12 = 6 Customers Per Month
on spending Rs 30,000
Rs 3,60,000
Rs 5,000

47. DATA
DRIVEN
MARKETING
ACADEMY
2021
Example 2:-
= 72 Customers a year
72 Customers x LTV of Rs 50,000 = Rs 36,00,000
ROAS will 10x here
So by Spending Rs 3,60,000/year you will
generate Revenue of Rs 36,00,000 in a year
Rs 3,60,000
Rs 5,000

48. DATA
DRIVEN
MARKETING
ACADEMY
2021
Marketing Budget = CAC x Customers
Ask yourself these:-
1) How much do you want to spend to acquire customer
2) How many customers do you want
So the formula is simply...

49. DATA
DRIVEN
MARKETING
ACADEMY
2021
Few More Examples
Website Design Agency
Interior Design Studio
1.
2.

50. DATA
DRIVEN
MARKETING
ACADEMY
2021
Let's Calculate a Marketing Budget
for Website Design Agency
Website Design Charge = Rs 10,000 or AOV
Customer Acquisition Cost (CAC) = Rs 2,500
Part 1
Desired Number of Customers per month = 10

51. DATA
DRIVEN
MARKETING
ACADEMY
2021
Let's Calculate a Marketing Budget
for Website Design Agency
Rs 2500 x 10 = Rs 25,000 (Marketing Budget)
By Spending 3,00,000/year You can Get 120 Customers/year
as per formula
per month
CAC x Number of Customers = Marketing Budget
Part 2

52. DATA
DRIVEN
MARKETING
ACADEMY
2021
Let's Calculate a Marketing Budget
for Website Design Agency
Monthly Revenue = Service charge (AOV) x Customers/month
Yearly Revenue = Monthly Revenue x 12
Rs 1,00,000 = Rs 10,000 x 10
By spending Rs 25,000/month
By spending Rs 25,000/month
Rs 12,00,000 = Rs 1,00,000 x 12
Part 3

53. DATA
DRIVEN
MARKETING
ACADEMY
2021
Let's Calculate a Marketing Budget
for Interior Design Studio
Interior Design Charge = Rs 60,000 or AOV
Customer Acquisition Cost (CAC) = Rs 10,000
Desired Number of Customers per month = 5
Part 1

54. DATA
DRIVEN
MARKETING
ACADEMY
2021
Let's Calculate a Marketing Budget
Rs 10,000 x 5 = Rs 50,000 (Marketing Budget)
By Spending 6,00,000/year You can Get 60 Customers/year
as per formula
per month
CAC x Number of Customers = Marketing Budget
Part 2
for Interior Design Studio

55. DATA
DRIVEN
MARKETING
ACADEMY
2021
Let's Calculate a Marketing Budget
Monthly Revenue = Service charge (AOV) x Customers/month
Yearly Revenue = Monthly Revenue x 12
Rs 3,00,000 = Rs 60,000 x 5
By spending Rs 50,000/month
By spending Rs 50,000/month
Rs 36,00,000 = Rs 3,00,000 x 12
Part 3
for Interior Design Studio

56. DATA
DRIVEN
MARKETING
ACADEMY
2021 Bonus Tip!
LTV = Life Time Value, amount you earn from a single customer
Now You Have Customer Data:
1. Name 2. Mobile No. 3. Email 4. Whatsapp Number 5. Location
How To Increase LTV?
1. Mobile No. - Send SMS - Offers, Discount Codes, Whitepapers, Send to your Social Media profiles
2. Email - Send Emails - Add to Broadcast List - Add to Auto Responder
3. WhatsApp Number - Send Educational & Promotional Messages
4. Address/Location - Send them Post Cards - Birthday Wish - Gifts
Increase LTV by offering more services

57. DATA
DRIVEN
MARKETING
ACADEMY
2021
Got Questions?
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Visit our Blog at eptins.com/blog
Thank You!

58. A brand is no longer what
we tell the consumer it is
– it is what consumers tell
each other it is.
Scott Cook,
Founder, Intuit
DATA
DRIVEN
MARKETING
ACADEMY
2021