A far too familiar conversation I’ve had with friends, colleagues, and clients is how to cut back on their marketing budget. Either it’s too high, they don’t see the need, or think they can do better with less. The real problem they’re facing is that they are not seeing the Return on Investment. If your company is faced with a similar situation, the question you should ask is, how do I make better use of my marketing budget?
Let me preface with this, if you are looking for if you should use content marketing vs ads, SEO optimization or any fill-in-the-blank marketing strategy, that’s a discussion for another time. What I want you to think about is not the vehicle, but how to better use your resources to convey the company mission.
As you go through the planning cycle for the upcoming year, there are several conversations that should take place. First, talk with the strategic side of the organization. Whether that’s the CEO, Chief Strategy Officer, or any others who are engaged in the firm’s strategic planning. You want to ensure that you understand the direction of the organization and how to craft the firm’s marketing strategy around reaching those goals.
Next, talk with finance or whichever group determines the budget spend that will be allocated to marketing. Share with them the insights from your strategy meeting and what your thoughts are about what you will need to make the marketing strategy successful. At the same time, get a feel for what the company is prepared to allocate over the next several (1-3) budget cycles. While you may not have the financial resources to realize the entire grand vision in the 1st year, it may be realized over a more expanded time frame and could prove even more beneficial.
Lastly, continue working within the department to produce metrics demonstrating concrete ROI. One of the reasons marketing spend is one of the first cuts a company makes when looking to reduce budgets is that many of the dollars spent are not traced to the dollars they actually earn. Think about it, if you demonstrate that the 15% increase in marketing spend last year resulted in an additional 22% in revenue, and will continue to increase revenues over the next 2 years, it makes it difficult to say no to that without some serious discussion.
Budgets are based on information available at a certain point in time. If you can find ways to improve the information, it will only make your budgeting process that more efficient and effective.