It’s planning season, marketers.
Are you donning your boxing gloves? Gearing up for another fight with Finance to spar over the funds you need to fuel next year’s programs and activities?
Gartner recently found that marketing budgets are beginning to recede, dropping from their peak (12.1% of company revenue in 2016) to 11.3% in 2017. Why? According to Gartner, the drop is due in part to marketing leaders being too distracted by tactics and execution.
Your CFO cares very little about your marketing tactics (besides wondering how much money you’ve spent on them!)
Here are 3 strategies to help ensure you get the kind of marketing budgets you need to beat your goals next year.
- Re-frame the questions coming from Finance
There are many things you can do to help ensure you get the budget you need, but it all largely depends on how you answer the questions coming from various parts of the business. Strategic decisions about marketing investments are made based on your ability to answer the right questions.
You may be familiar with “the CFO Interrogation” where Finance asks questions like:
- How much are you spending on this vendor?
- How much are you spending on trade shows?
- What did we get for this spend?
- Is marketing pulling its weight?
While having the answers here is important, these questions do not position marketing as a strategic part of the company’s overall growth initiatives.
Instead, work to re-frame the conversation (you’re good at that, you’re in marketing!) Seek to discuss questions like:
- Why are we spending in this area?
- How can Marketing impact the business tomorrow?
- What’s working and what is not?
- What are the tradeoffs I’m making
- If we opened a new region, how much would it cost?
- How much are we spending to launch this new product?
Finance may ask: “Marketing, what have you done for me lately?”
Your goal should be to focus on “where should we spend our next dollar?”
- Figure out how marketing spend aligns to business goals
Allocadia’s Marketing Performance Management benchmarking researchuncovered that 83% of the best-performing companies, those expecting bigger budgets and revenue growth, “often or always” align marketing performance goals to their company’s objectives. This is compared to only 50% of those with flat, or negative growth.
In other words, if you want more budget, you’ve got to show that Marketing is in lock-step with company objectives by speaking the language of the business.
Always work to roll metrics up to align with company objectives and/or marketing contribution to the business. This does not mean that all metrics need to align directly with contribution to the business, but there should be a framework or path that allows every measurement to show how it is affecting the business. For example, a PR push that is part of a larger global campaign may also increase market share.
- Think about different layers of measurement
Consistent and targeted measurements are how the CMO and marketing leadership communicate their intentions to the rest of the department – they’re also the mechanisms used to report back success (or failure) to their superiors.
But, CMOs do not need reports on clicks, page views, and likes; those are more appropriate for specialists or field marketers. Likewise, revenue is not the only key performance indicator (KPI) that matters.
At all levels of marketing, a tiered metrics system can help to clarify what matters in your quest to earn budget, and what’s par for the course of ensuring day-to-day execution is on-track. That’s the strategy used at GE Digital. This team’saward-winning Marketing Performance Management efforts clearly define which metrics matters – and to whom.
- Activity – granular measurements, intended for the team responsible for execution, reviewed daily or weekly tomake adjustments to campaigns
- Output – the result of the activities they perform as a marketing organization, reported to marketing leaders who use the information to make pivots in integrated campaigns and small resource changes.
- Impact – KPIs showing the true impact of Marketing’s work, most commonly reported to the sales or commercial organization. Examples include number and value of sourced opportunities, pipeline value, deal velocity and conversion rates.
You’ll notice that these impact metrics look similar to the KPIs of a sales organization, or a P&L, focusing on opportunities, pipeline, and conversion. This is not by accident. GE Digital has crafted their metrics specifically in the language the business cares about – money, and return on investment.
That’s the kind of effort that changes perception of marketing to that of a strategic partner, helps to earn trust, and results in larger marketing budgets to help you crush your goals.
This post originally ran on The Marketo Blog (12/20/17)