Budget reviews can be a scary time for marketers,
not just in tech marketing.
Marketing’s budget is consistently at risk because it is too often seen as a cost center, rather than a source of revenue.
Why not circumvent the risk and get on the front foot?
Show positive ROI with your current marketing budget
Proving that your current marketing budget delivered a positive Return on Investment (ROI) makes it far more likely that you will retain or grow your budget. Conversely, if you don’t present any evidence that your budget is delivering a positive financial impact, marketing will look like a safe area to cut. It’s simple. And statistics back this up.
According to Hubspot’s State of Inbound report, “Respondents were 20% more likely to receive a higher budget in 2015 if ROI was tracked in the first place, and twice as likely to see an increased budget if that tracked ROI was shown to be higher than in 2014.”
If you haven’t got off the execution treadmill to do the hard work of proving marketing ROI, now is the right time to get your house in order. If you do nothing else from this list, do this.
Benchmark other companies’ marketing spend
For marketing-skeptic superiors, evidence of other businesses’ investments in marketing can be helpful. Skepticism about marketing is most usually found in earlier-stage tech businesses with engineering-focused founders. True techies routinely underestimate the impact and potential of marketing.
There are reliable sources of industry-wide data like CMO Survey’s reports and Hubspot’s State of Inbound survey, which can give you good benchmarks to that tricky question of “How much should we be spending on marketing?” If your marketing spend is significantly lower than your industry’s average, you have a strong kick-off point for explaining what you could put into place and achieve with a larger budget.
Explain how the sales cycle is becoming a buying cycle
You can’t necessarily assume that your CEO or other budget-holder knows just how much the sales cycle has shifted in recent years. For the less marketing-savvy superiors, those sales leads that appear “out of thin air” are just evidence that “the word is getting around” about your capabilities. Rather than them being the result of hard-fought marketing awareness combined with purchasers’ online research.
According to CEB Global and Google, 57% of the purchasing decision is now made before contacting a supplier and according to Accenture, 94% of B2B buyers report that they conduct some form of online research before purchasing a business product. To explain this, it is wise to develop (and subsequently test) a model for your sales or buying cycle, showing the previously hidden part of the sales funnel.
Show thoughtful prioritization
If you can show that you are prioritizing activities that are working best for your company, you are showing fiscal responsibility. That is something that every CEO wants to see. It is evidence that you are taking your budgetary responsibilities seriously and that you are worthy of maintained investment.
It means doing more of what is working and less of what is not working. Again, if you haven’t put aside the time to analyze the varying successes of your marketing channels, now is the time to do so. Even if that means your prioritization plan is future-looking, where you are showing where you plan to cut or increase investment in the near future.
Prepare a Q&A doc for your budget meeting
And finally, why not take a page out of the PR handbook? Develop a Questions & Answers (Q&A) document just like you would for your spokespeople around a major launch.
There will be a lot of tricky questions that need thoughtful answers. Brainstorm all the difficult questions that you don’t want to come up and write down intelligent responses to them. You’re not looking to be scripted, just prepared. Like with mathematics exams, you get points for your working out even if you don’t have all the answers.
Every CEO is looking for evidence that a department is doing well or poorly. And they will often take lack of evidence as evidence of lack. So if budget review time is still scary, take the initiative and use this as an incentive to start your transformation into data-focused marketing.
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