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Avoid a Zero-Based Budget by Driving Growth as a Marketing Center of Excellence

by Laura Patterson  |  
March 3, 2016

Finance leaders identified marketing efforts, or expanding relationships with existing customers, as the top strategic factor driving company growth and profitability in 2016, according to the 6th annual CFO Sentiment Study. Nevertheless, marketing budgets are already on the chopping block.

For example, to support Unilever's efficiency expansion drive, its marketers will now have to adopt "zero-based budgeting": They'll have to justify spending on all new activity instead of their budgets' being based on the previous year's spending.

What might be the underlying cause of budget reductions despite CFOs' belief that both top-line and bottom-line growth in 2016 will require sales and marketing? It's likely that despite improvements in technology and processes, as well as an increased focus on measurement, only few marketers can actually prove their value.

Marketing Performance

Since 2001, the annual Marketing Performance Management (MPM) Benchmarking survey has asked a pivotal question to facilitate comparison of the study's insights: "What grade would the C-Suite give the marketing organization for its ability to demonstrate its value and contribution to the business?"

Study data collected over more than a decade has revealed three marketing performance personas related to the C-Suite grade:

  • The A's: The more strategic and data-driven marketers who primarily focus on how to create value for customers and the business. This best-in-class group leads all others in terms of performance. They are identified as Value Creators.
  • The B's: This group sees its primary role as serving the sales team. These marketers' focus is on demand generation. They constitute the middle of the pack in terms of performance, and they are identified as Sales Enablers.
  • The C's and D's (or lower): This group operates as a service provider or internal agency to the organization, producing marketing outputs as scheduled as well as on demand. Compared with other marketing organizations, they constitute the Laggards in terms of performance, and they are identified as the Campaign Producers.

While the pressure and the investment in technology to support performance measurement management is increasing, the percentage of marketers able to prove their value and contribution and achieve excellence is decreasing.

Figure 1: The percentage of marketers achieving excellence is decreasing

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Laura Patterson is president and founder of VisionEdge Marketing. For 20+ years, she has been helping CEOs and marketing executives at companies such as Cisco, Elsevier, ING, Intel, Kennametal, and Southwest Airlines prove and improve the value of marketing. Her most recent book is Metrics in Action: Creating a Performance-Driven Marketing Organization.

Twitter: @LauraVEM

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  • by JV@l'Attitude in Cairns Fri Mar 4, 2016 via web

    The premise of this article - that every NEW expenditure must be justified - is at odds with my knowledge and experience of ZBB, namely that a new expenditure year begins with a blank page and EVERY expense must be justified.
    Granted, this method does require greater analysis of ROI, but clearing out the non-performing items opens the way for more productive items.
    And a potential upside is that the budget may possibly be slashed.
    Scary, isn't it?
    Feedback welcome.

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