What Budget Should I Allocate for Demand Generation?
Start from revenue, not channels. Size spend from pipeline targets and allocate across create (demand) and capture (conversion) to hit goals efficiently.
Use a revenue-back model: 1) define new revenue target, 2) translate to required pipeline (target ÷ win rate), 3) set the marketing-sourced share, 4) model conversion rates to estimate required opportunities and hand-raisers, then 5) fund the plan with a budget that achieves that volume at a sustainable CAC payback. As a guardrail, many teams land between 8–12% of ARR (early-stage: higher; enterprise/renewal-heavy: lower), split roughly 60% demand creation / 40% capture & conversion, then refine by ROI.
Budget Building Blocks
From Revenue Target to Budget: A Simple Model
1) Revenue goal: $5M new ARR. 2) Win rate: 25% ⇒ required pipeline = $5M ÷ 0.25 = $20M. 3) Marketing-sourced: 50% ⇒ $10M pipeline. 4) ASP: $50k ⇒ need 200 opportunities. 5) SQL→Oppty 40% ⇒ need 500 SQLs. 6) MQL→SQL 25% ⇒ need 2,000 MQLs. Fund channels and content to reliably produce those MQLs at your target CAC/payback.
Start with a working split: 60% Create (content engine, social/video, events, category POV) and 40% Capture (offers, CRO, retargeting, paid search, conversion tools). Shift dollars quarterly toward the best pipeline per dollar by source and intent.
Instrument the plan: attach every program to a hypothesis, owner, target, and review date. Track leading indicators (reach, engaged sessions, branded search, content-assisted SQLs) and lagging metrics (cost/opportunity, pipeline, revenue).
Quarterly Demand Gen Budget Sprint
- Week 1: Lock revenue→pipeline math, marketing-sourced %, and conversion ladder. Set CAC/payback guardrails.
- Weeks 2–3: Allocate: 60/40 create/capture; define program-level budgets (media, content, tools, testing). Prebuild 3 offers per segment.
- Week 4: Launch with dashboards by intent & source. Set commit/upsides and a 10–15% testing reserve. Schedule a QBR to reallocate.
Frequently Asked Questions
Turn Budget Into Predictable Pipeline
We’ll translate your revenue goals into a demand-gen plan, allocate spend across create vs. capture, and build dashboards that prove impact.
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