KPI Benchmarks : Marketing Expense as a Percentage of Total Revenue
- Benchmark Range
- Benchmark Average 7.0%
- Benchmark Sample Size (n) 40
* Is High or Low Best: Lower is Better
KPI Details : Marketing Expense as a Percentage of Total Revenue
Marketing Expense as a Percentage of Total Revenue measures the expense incurred by the Marketing Department (wages, benefits, overhead, campaign expenditures, etc.) in relation to the total revenue earned by the company over the same period of time. Higher than average values for this metric can be indicative of highly manual (i.e., error and rework prone) marketing processes and procedures (e.g., marketing campaigns that are almost completely generated and distributed manually), excessive time spent on low-value work (e.g., printing, scanning, etc.), overstaffing, general inefficiencies within marketing processes (e.g., inefficient email distribution, lead generation research, customer communication management, etc.), and sub-par Marketing employee training and performance. While companies typically seek to streamline operations and employee positions to reduce expenses in the Marketing Department, great care should be taken when doing so as too many layoffs can have a negative impact on company morale.
KPI Best Practices : Marketing Expense as a Percentage of Total Revenue
- Assign routine, manual tasks to lower cost staff
- Hire self-motivated employees that require less supervision to minimize management personnel costs
- Invest in market research to focus ad campaigns on target audiences
KPI Calculation Instructions Marketing Expense as a Percentage of Total Revenue?
Two values are used to calculate this KPI: (1) the expense incurred by the Marketing Department, and (2) the total revenue earned by the company over the same period of time. Include labor (wages, salaries, commissions, benefits), overhead (occupancy, utilities, supplies, advertising, legal fees, travel costs, etc.), technology (hardware, software, end-user operations, etc.) and campaign costs in the numerator.
KPI Formula :
(Marketing Department Expense / Total Revenue Earned) * 100