All of your tried and true lead acquisition events are gone (at least for 2020). What now?
The topic of marketing budgets is more relevant than ever as the Coronavirus pandemic disrupts everything from financial markets to industry events large and small. To procure spend and wield that spend in ways that increase trust in Marketing's abilities, marketers need to pave a clear path to revenue impact.
Budget battles—or at the very least contentious conversations that question the fundamental efficacy of Marketing's role—are an all too familiar a phenomenon that accompanies any request for increased spending. But when black swan disruptions, such as Coronavirus, suddenly eliminate seemingly safe investments in fundamentals like event marketing, the opportunity to get aggressive and get back to Marketing's creative roots is something that should have ever marketer salivating with excitement.
A crisis brings both danger and opportunity. So, when the going gets tough, the tough get creative.
For most marketing teams, proposing new and creative ways to engage buyers means assembling a solid business case to support their suggested pivots. In anticipation of those conversations, here are some key steps to ensure you walk out of budget meetings with a collective thumbs up and avoid missing out on what could have been a huge opportunity.
1. Ensure you have the right foundation in place
Let's start at the beginning. Ask yourself this simple question: "Does my organization understand marketing?" Sounds crazy and basic, but most organizations don't. Marketing, like weird cousin Stevie, is misunderstood.
In fact, the most common statement I hear from CEOs (or really any C-level exec who isn't the CMO) is this: "I'm not a marketer. I don't understand this stuff." If you have people in your organization saying that, you haven't laid the groundwork to ensure marketing's success within your own company.
Everyone understands that Marketing wants to be in front of the people who matter, to have great conversations with them, and to get them to want to buy. That's obvious. But when executives say something about not understanding marketing, they're really saying they don't get the operational garbage we've put in front of them.
Regardless of the time you've poured into your program brief or budget request, pump the brakes if you don't have a solid foundation. If organizational buy-in is lacking, start by clearly outlining the need to align the organization around Marketing's role and KPIs. You should plan to request alignment sessions, executive offsites, or whatever's necessary to ensure that the leaders in your organization squarely understand the value that marketing brings and just how they plan to manifest that value.
Without that investment in the foundation, your budget will always be looked at as an expense, not an investment.
2. Focus on connecting business objectives to marketing outcomes
One of the biggest issues with most budget requests is that they're overly complicated and deep in the weeds. Marketers love to roll into these meetings with a head full of plans and a mouth full of numbers: "We want to spend $5K on Google Ads in this particular segment, and we're expecting a 3.2% conversion rate which means..." and on and on. Even if you're enamored with such tactics, your execs are already mentally checked out.
Instead, go for what counts: business outcomes. Apply the following framework:
What's the timeline?
What's the investment?
What's the Leading Metric? (90 days)
What's the Interim Metric? (3-12 months)
i. Pipeline growth
ii. Pipeline acceleration
iii. CAC reduction
What's the Lagging Metric? (6-24 months)
i. Revenue increase
ii. Revenue retention
iii. LTV increase
What's the Optimization Strategy?
Boom. Now you've offered a strategic business case for the money you're requesting, and you've alluded to the fact that you have well-formulated tactics to support it all.
So, stop framing everything in terms of "here are our proposed tactics," and start talking about "here's the impact we'll drive."
Remember that the people in your organization who are cutting the checks are looking for returns, and rightly so. The more you can think like them, and pitch accordingly, the better chance you'll get what's on your wish list.
3. Align with Sales
Your budget pitch should be done in conjunction with your head of Sales or chief revenue officer. You have to present your budget as one side of the same coin that Sales is pitching. You and Sales are part of a team, and getting into this mindset will only help you get what you need.
Show your executive team how you and your counterparts will leverage the same initiatives, and what each of you needs in order to do it.
People trust Sales. So, when you put a plan together with them, there's instantly more confidence in it—and in the performance you're saying you'll produce.
4. Benchmark, benchmark, benchmark
Metrics suck without benchmarks. Who cares if you have a 5% conversion rate if you're not sure what it was last year? That 5% could be bad or good, depending on context. And that's what benchmarks provide.
If you don't have baseline measurements in place, change your budget request to ensure you can emphasize that and integrate it into the yield of the imitative. Benchmarks provide value, so include in your request the variables you need to establish them. Need more tech? Need more headcount? You only get one chance to cite a lack of benchmarks.
5. Make friends with reality
Marketing budgets often seem to be created as if Monopoly money is what's at stake. Remember that it's real money being spent, so it has to be realistic. Don't ask for a 2000% increase in retargeting ads (trust me, just don't).
Instead, use the performance of the company as the underpinning of all requests. Call it out if you missed your performance goals last year and explain why. Is it because you didn't invest in an area you should have? Or you invested in it, but in the wrong way? Be prepared to say how your new request will help you perform differently.
Oh, and back to benchmarks: if you don't have any internally (or even if you do), it's a good idea to gather benchmarks from similar organizations. You can show you've done your research and you're asking for something realistic. You may even be able to demonstrate that you're getting similar results to your peers but working with half their marketing budget. That kind of comparison can be powerful.
6. Recognize that the largest variable—trust—isn't written on paper
Here's the dirty truth of marketing budget requests: Most CEOs would love to invest in something that will get them the 3x return (or whatever) you're promising them. They just don't believe you can do it. And therein lies the budget disconnect.
It sounds harsh, but think about it from the executive perspective. They can get pipeline from a sales rep within six months, but Marketing is a function of influence. In all other areas of the business, you can do something and see an impact on revenue or receive something tangible. It feels good to look over and see an occupied seat where an empty one sat two weeks prior. Human nature loves the perception of tangibility. Marketing can easily seem intangible if you're not presented with goals or data you can hold on to.
Therefore, it's your job to introduce the right metrics to monitor, like accelerating deal cycle or increasing average deal size. Set that expectation up front, along with a timeline. If you can demonstrate why you're confident in your approach and why your proposed investment is more sound than of the other options they may be considering, then you tap into the mindset of the CEO.
Like any other investment, marketing budget allocation centers on risk, reward, and timeline. It's your job to cover those bases; if you're counting on your audience of executives to fill in those gaps, the decision isn't going to swing your way.
What if they still say no?
Well, you got denied. What do you do now? The first step is to ask why. If you get the response that it's because the organization just doesn't have the money, dig deeper. Ask what it would take to prove that the initiatives you outlined will outperform others that get funded.
The key is to understand just what you're competing against and why that spend seems more viable than your proposal. Then you can better understand blockers and potentially leverage a "proof of concept" approach to adjust perceptions.
Several years ago, my marketing team asked for a budget that meant a sizable increase in spend—to the tune of 2x. I knew it wasn't possible to do that without first validating the concept and confirming their assumptions, so I decided to prove the concept first with our top 10 client accounts (basically, ABM before ABM was called that). The result was a 6x ROI on spend. Once that happened, my trust in Marketing grew; as a result, so did the marketing spend.
Marketers have to build trust before autonomy can be achieved. Ask yourself where the low-hanging fruit in the business resides. What quick wins can you get to build trust?
Trust is a prerequisite for innovation, plain and simple. If you're finding yourself staring at a daunting blank page because your big Q1 and Q2 events have been canceled, start with ROI, then work back, and watch your plans come alive.
You may like these other MarketingProfs articles related to Management:
- How to Budget Strategically for Your Digital Marketing Campaigns
- How to Build a Great Marketing Team in 2023: Paul Flaharty on Marketing Smarts [Podcast]
- Why In-House Brand and Creative Teams Restructure
- What Makes a Client Toxic? [Infographic]
- Do You Really Need to Hold That Meeting? [Infographic]
- Workplace Communication Trends for 2022 [Infographic]