Question

Topic: Strategy

Help! Board Buy-in On Marketing Budget Proposal.

Posted by marcom on 9/5/2007 at 12:01 PM ET 250 Points
I work for a relatively small traditional telephone company that is beginning to offer new services. In the past we have added high-speed internet and are now looking to add IPTV (cable TV). We will eventually be a triple-play provider.

I started my position earlier this year. The company hired me to begin marketing them in a competitive environment in order to drive more sales, increase loyalty, promote the future of the company, increase revenues, launch new products. I have extensive experience in marketing telecommunications services in highly competitive environments.

When I was hired the CEO told me that the company was ready to move forward in the face of competition. I believe HE is. The problem lies with the other executives and Board members. I have put together a very extensive marketing budget for 2008. The budget is broken down by weeks, quarters, tactics, dollars amounts, specific marketing pieces needed, etc.

The primary problem is that the company has never formalized a marketing program in the past. Therefore they had no real idea what to anticipate to invest in marketing. Again, I am attempting to move this company forward. They are stuck in the past and are quite frankly afraid to spend the money. I have heard through the grapevine that some of them could accept a marketing budget of $100,000.00. Mine is 5 x's that. They look at the glass as half empty instead of half-full. To them tomorrow doesn't hold a lot of promise. It is as if they are more concerned with prolonging the bleeding and their eventual demise.

I need to prepare a presentation to convince them of the need of investing this money. Any ideas on where to start? What should my major points be to them? What is the best way to sell this budget to them?
To continue reading this question and the solution, sign up ... it's free!
SUBSCRIBE
Or, SIGN IN

RESPONSES

  • Posted by melissa.paulik on 9/5/2007 at 12:12 PM Member
    I would start with overall company strategy. If they aren't buying into the same vision as the CEO, that's a big problem and probably not one marketing can resolve.

    If they do buy into the same vision, I would talk with them about marketing tactics and what can be expected from the dollars being spent. Make sure everything is measurable and that the approach supports the company objectives. In my experience, executives have a lot more issues with spending money if they don't know how results are going to be measured.

    Be realistic about what a smaller organization is able to spend. When I was with a Fortune 500 organization, we spent a lot of money on building awareness for our products and "thought leadership" marketing. Now that I am with a much smaller organization, and we have very specific operating income goals to hit, my budget is much more targeted.

    Finally, see this as a negotiation. You might not be able to get them to budget $500K, but maybe you can convince them to budget for more than $100K if you can show them the value of the money spent.

    Good luck!
  • Posted by Jay Hamilton-Roth on 9/5/2007 at 12:39 PM Member
    It's not about the money. It's about something else - loss of control, fear of the unknown, or lack of trust in you (or your plan). Put your plan aside until you get the key issues the board cares about. Address the concerns head on, then present your solution in the bigger picture, showing your track record, the ROI of your solution, etc.
  • Posted by marcom on 9/5/2007 at 1:19 PM Author
    So far some good information.

    Melissa and Jay you have both read through the lines and see what I am a part of daily. That is...VISION. There is not a consistent one here. I remember a few years back asking another CEO that I worked for what the vision was, what was to be our focus as we went through our strategic planning for the upcoming year. We eventually decided that the vision was toward Broadband with that being the core emphasis for the future of the company. Products and services could be layered on top but that (broadband) was the core product to be promoted.

    Around here there are two camps. One wants to know what the outcome will be if we do nothing. How bad will it get? The other says if we do something how does it prolong the life of the company as we battle against a top 5 cable giant. I believe that the only answer is to move forward, toward a deregulated products and services company. We have to change and that scares the heck out of the status quo crowd.

    BARQ, yes I have done a SWOT analysis but it has only made it to the CEO and the employees on the front line. It has never been put before the Board. Yes, this would be a powerful and necessary thing for them to walk through.

    I have been testing a broadband promotion in one of our markets and so far it has performed extremely well. We have already shattered the total acquisitions for last year (12 months) in only three months in the field. I am scheduled to update the Board on this tomorrow. This is part of the story that I am illustrating to the Board in advance of presenting my Budget to them. I feel I must begin to show the effectiveness of the campaign, my experience and the results of my strategies prior to hitting them with the budget proposal.
  • Posted on 9/5/2007 at 4:05 PM Member
    Posted by Kevin Szprychel

    My Email [Email address deleted by staff. This type of personal information goes in the Member Profile, not the response.]

    One thing you can do is hire an outside consultant from a reputable marketing/business educator and have them come teach a course or seminar on the fundamentals of marketing.

    Learning marketing 101 from an additional authority besides yourself gives added credibility to your proposition and it makes it easier to pitch your budget because now you're dealing with an educated buyer (i.e. your boss and/or peers).

    Also, make sure you have the measuring/metrics infrastructure set up before hand to demonstrate ROI. You may not get your ideal budget this year but with documented success next year will be a different story.

    Good Luck and Happy Marketing
  • Posted on 9/5/2007 at 11:36 PM Member
    We had a similar situation like yours before and we got our budget. We used reverse-psychology. We showed them what the competitors are doing, what works for them and what effects it had on them and the effects on our company. Next, we showed them similar scenarios from the past from companies of the same industry and showed them the consequences that happened when they failed to act. Next we showed them that by implementing the proposed marketing plan, we would be able to limit the competitors sales therefore affecting their net income. In this case, you need to show them the competitors actual data such as sales, marketing budgets, financial leverage, etc, data which you can buy from external sources. Finally, you have to give them two options, either to approve the marketing plan or if they dont, then show them plan B. Plan B will still be using the traditional plan, however, the outcome is not so clear, and there is a wait and see scenario for the results of Plan B. Plan B should also be a good plan, but plan A should be the best plan in the long term. Both ideas should be from you, and they will just approve it. You have to show them that you are a good soldier and you will follow their decision, however, they have to ensure you that your butt is covered when they choose plan B, since it was their decision, not yours.
  • Posted by Chris Blackman on 9/6/2007 at 7:55 PM Member
    Many (Melissa, Jay, Marcus) have hit the nail on the head and I'll summarize as follows:

    1. Get the CEO on side before submitting the plan to the board.

    2. Make the budget strategy-based. If they've approved the strategy (presumably?), how can they not approve the budget?

    Conversely, how could they approve the strategic plan without a budget attached to it?

    What on earth were they thinking?

    3. Develop a strong set of metrics for reporting back to the CEO and board on strategic progress and contribution to the vision and results generated by the marketing effort

    Good luck.

    ChrisB
BACK TO TOP

Post a Comment

Related Discussions

Community Info

Top 25 Experts
(Strategy)