The 10/40/50 Rule to Marketing Budgets

Today’s marketing has reached new heights in terms of how marketing is defined. You can Google the term, you can ask hundreds of business owners and recent business school graduates and each will have their own definition.

Having worked with hundreds of business owners, what I find the most fascinating is how subjective not only the term, but the function of marketing is in business. Some use it to define identity items such as branding, logo, colors and personality. Others define it as advertising strategies or customer relations and new business efforts.

But all struggle with how to allocate their marketing spend and how to estimate how much should go towards their marketing efforts.

According to the US Small Business Administration, you should spend approximately 8% of your total gross revenues in marketing your business. So for a $ 1,000,000 business, $ 80,000 should go towards marketing your business. But in a recent survey conducted by the CMO Council, most respondents reported spending between 5% – 6%.

Whatever that amount is for your business, you want to commit to the BLAST Method where you look to build strategies that integrate Branding, Leadership and Sales strategies to drive results. Meaning, your marketing isn’t done in a vacuum. It is strategically aligned with the overall goals of the business and connected throughout your operations.

But, how should you be allocating your spend?

Here is the BLAST recommendation:

The 10/40/50 Rule

You will serve three core audiences in your business. The largest population will be at the top of your funnel called “The General Population” This is the people who your marketing will hit, but not necessarily resonate with simply because they may or may not be in your customer profile. This group should represent 10% of your budget. The overall goal of marketing to this group is to move them to from “The General Population” to the next group, “Prospects”.

Your prospect audience consists of those that fit your ideal customer profile. These are the people who are familiar with your brand, maybe come to your website and show interest, but they haven’t bought from you yet. This group you will invest 40% of your overall budget. The goals from this group is to entice them from window shoppers to actual purchasers or “Customers


And lastly, 50% of your overall marketing budget should be allocated towards your customers. Getting to know them, building deeper relationships and reminding them of your value. A happy customer will evangelize your products and services and help you attract new customers along the way.

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