Question

Topic: Research/Metrics

B2b Marketing Spend Questions

Posted by SeanGeehan on 8/13/2008 at 10:37 AM ET 125 Points
I was wondering if someone might be able to provide answers to the following questions or point me in the right direction. Thanks in advance for your help.

1. What is the average marketing spend (in percent) relative to overall sales in a B2B firm?

2. In B2B and B2C, what is the breakdown in marketing spend in acquisition vs. retention?

3. What is the ROI in B2B in new customer acquisition per dollar?

4. What is the ROI in B2B in current customer retntion and growth per dollar?

5. What is the average customer retention rate in the B2B space:
a) When customer buys only one offering/solution?
b) When customer buys 2 offerings/solutions?
c) When cutsomer has purchased 3+ offerings/solutions.

Thanks again.
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RESPONSES

  • Posted by Sachin on 8/13/2008 at 12:57 PM Accepted
    Hi Sean,

    The questions you asked require classified information. I can point you to purchase Marketing Sherpa's 2008-09 Business Technology Benchmark Guide for B2B marketing https://www.sherpastore.com/btbmg09.html?9043

    I will try to answer some of the questions from my experience.

    1. What is the average marketing spend (in percent) relative to overall sales in a B2B firm?
    Ans:
    0-100 Employees ~ 12%
    100-1000 Employees ~ 5-10%
    1000+ Employees ~ 4-5% of the total sales.

    Below 4% might be seen by Investors as a low brand sustenance effort and over 12% might be considered over emphasis on marketing's support to sales.

    2. In B2B and B2C, what is the breakdown in marketing spend in acquisition vs. retention?
    My approximations
    B2B - Acquisition vs Retention 60:40
    B2C - Acquisition vs Retention 80:20

    3. What is the ROI in B2B in new customer acquisition per dollar?
    Over a period of one year I would say ROI can be as high as 200%-400%. (Depending on what media you chose) In my present company, after 1 yr of focused effort, where Email and Online are the 2 media I leveraged the most and my ROI has crossed 200%.

    4. What is the ROI in B2B in current customer retention and growth per dollar?
    Well to be honest, I didn't measure this. However, the ROI is much higher as I get mostly repeat customers and the effort spent is the least. I would say as high as 400%.

    5. What is the average customer retention rate in the B2B space: (approximations)
    a) When customer buys only one offering/solution? - 50%-60%
    b) When customer buys 2 offerings/solutions? - 65-70%
    c) When customer has purchased 3+ offerings/solutions. -90%

    I would strongly recommend to refer some professional research for this. My answers are purely based on my understanding and experience in industry.

    Thanks,
    Sachin
  • Posted by SeanGeehan on 8/14/2008 at 11:34 AM Author
    Thanks, Sachin. This is a very good start. I appreciate the time you took to provide this information.

  • Posted by Frank Hurtte on 8/20/2008 at 9:55 AM Member
    If your business takes part in any association PAR reports you can easily pull information sorted by size of firm and profitability quadrant. Not surprisingly, the higher profit firms spend more on sales and marketing than their fellows in lower quadrants.

    If your business is a wholesale-distributor contact me I may be able to provide some detailed information.
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