For many, early December is the final push for getting your marketing budget approved. Here are 5 questions to help you get, or arrive at, the answer you want.
Who approves the marketing budget?
One way or another, you are sending this to a decision-maker—even if the decision maker is you. How do they make decisions, and on what criteria? The more strategic and systematic the process, the more beholden you are to it. This may mean that if budget projections are due by 4:00 PM and you deliver them at 4:05 PM, your budget requests may not even be considered.
Solo-preneurs and small business owners should take great care to self-monitor the multiple roles they play in this decision. Costly failures result from investing in a tactic because, “I like it,” or, “It was recommended,” or, “It’s new and cool,” or, “Everyone else is doing it,” or, my personal favorite, “No one else is doing it.” (Often, good reasons abound to explain why no one else is doing it.)
Do your homework. Do the strategies and tactics in question support your overall business goals? Are they consistent with your overall Business Strategy? Is the medium one that is used by your target personas – the type of customers you want to attract? And do the math to find an honest projection about how your budget will impact the bottom line.
Is my marketing budget consistent with the current state of my business?
When you first meet with Webolutions, we’ll talk about two areas of marketing: Lead Generation and Existing Customer / Client Engagement. The former is the hard part—acquiring new potential customers carries a cost 4-5 times more than retaining and marketing to the customers you already have.
To some degree, active new lead generation is an ongoing need for everyone. If you are a new business, or if you are confident you are maximizing your close rate, and if you are currently and successfully leveraging Contact Relationship Management (CRM) and Marketing Automation to engage the contacts you’ve already acquired, budget emphasis should be placed on lead generation. This may mean introducing or increasing budget for acquisition tactics like Search Engine Optimization (SEO) or Pay Per Click advertising.
Often, an analysis of the marketing and sales funnel reveals a lower-cost, higher-upside opportunity to do more with the leads you are already acquiring. Any business or organization with an existing database of contacts should examine it for retention, upsell, and referral opportunities. Tactics for this may include creation or upgrade of a systematic referral program, CRM and Marketing Automation, or simply examining your experiential marketing strategy—can you increase retention and referrals by improving the experience your customers have with you?
Have I budgeted time?
In addition to dollars, marketing requires a time investment. If you’re going to throw it over the fence and hope it works, don’t hope too hard.
Get honest with yourself, your marketing partner, and your staff about how much time is needed and available to make it all work. Detail the process and assign, and hold people accountable to, roles and responsibilities. If you are adding a tactic rather than replacing one, where does this time come from?
Committing to an unsupported tactic is a money pit. You can’t afford it.
Does my marketing budget produce positive ROI?
While organizational cultures have moved decidedly, irrevocably, and thankfully away from avoiding risk and toward rewarding smart tries, Marketing is and will always remain an investment from which a return should be expected.
This does not mean every tactic needs to produce more than a dollar of revenue for every dollar spent. It does, however, mean that any exercises undertaken for testing or learning purposes must be accounted for as a cost and paid for by revenues produced within the overall marketing strategy. At the end of the year, quarter, or month, marketing needs to show kinetic upside, even and especially while investigating new potential approaches.
The goal of research or a test is not profit or revenue; it is to learn something. That said, when performing a test in marketing—as in any area of business—the goal should be to learn if and to what degree a strategy or tactic might produce positive ROI.
For those tactics, then, that are carrying the load, speak to the bottom line. At what point does the channel reach break-even on the initial investment? What is the increase you project in sales? Revenue? Overall profitability? Are you increasing velocity through the pipeline? Closing more deals? Increasing revenue per unit? Decreasing cost per acquisition?
Get the Team on Board.
Don’t go it alone. Ask for observations and experiences. Get additional perspectives. “I think…” is a good way to lose the confidence and attention of a decision-maker beholden to results and a budget. “We have found…,” conversely, implies the team is on board after analyzing data. Come with that, and they must listen to what comes next.
Doing this, you may find that your idea isn’t as great as you thought, or for reasons that may or may not have anything to do with logic or math, that your time and efforts are better spent elsewhere. And that’s OK. You’d rather know now.
Even a fool is thought wise if he keeps silent, and discerning if he holds his tongue. – Proverbs 17:28
If the turkey isn’t ready, let it roast. If the team isn’t ready, or the math doesn’t come together, or if there isn’t enough information available, or if you are budgeting for research and testing this year, well, you’re already strategically planning for next year’s marketing budget, aren’t you?
Getting your marketing budget approved can be stressful. Use these tips to make it a rewarding experience.