December 29, 2008
You’ve drafted your 2009 marketing budget – and you’re convinced the integrated plan you crafted will get a great ROI. Now you’ve got to defend every line item with chief executives who expect you to justify every expenditure. Are you ready?
Get started by reading our two-part Special Report on defending your budget. Part I this week outlines tactics that can help prepare you for budget scrutiny. Among those tactics:
-Take advantage of your relationship with the CEO and other decision makers
-Pre-sell new marketing initiatives for the upcoming year
-Prepare research and metrics to defend your line items
In today’s troubled economy, defending your marketing budget is not a matter of “if,” it’s a matter of “when.” And “when” for most marketers is happening right now as chief executives assess or reassess next year’s business goals and spending plans.
Indeed, as the chief marketing officer, you must be well prepared to defend every single line item in your budget – especially in a recession. If you come up short, says Bryan Stapp, marketing consultant and former CMO for an online mortgage lender, you’re much easier to replace than a CFO or CIO.
“The CMO is typically in a more vulnerable position if he’s not created a scenario where marketing has a seat at the table and is viewed as a lifeblood of the company,” Stapp says. “It comes down to really having a great relationship with the CEO, understanding what his or her objectives are and how marketing is contributing to achieve those things.”
5 Preparatory Tactics to Implement Before Defending Spending
Tactic #1. Build relationships with decision makers
Defending your budget is a prime time to take advantage of the relationships you should have developed with the CEO, CFO, and other execs throughout the year. Those relationships should help you understand:
- Financial situation of the company
- Expectations your CEO is being held to by a board, owner, or shareholder group
- Dynamics of the competitive situation
This information will influence your decision making on spending and how you form a marketing plan. For instance, is your CEO being held to a plan for revenue growth? That’s going to dictate a series of actions that are very different from a scenario where the CEO must focus on cost-cutting and maintaining business during an economic downturn, says Stapp.
Develop a relationship with top executives by:
1. Getting on their calendars
Initiate a once-a-month meeting where you share a state-of-the-union type of briefing about how marketing programs are doing.
2. Sharing your challenges
Challenges might be personal, staff, or vendor issues. Don’t keep them a secret.
3. Asking for advice
Never ask your CEO to help you fix a specific campaign, for example. That’s what you were hired for. But do ask about issues, such as ways to motivate your team or connect marketing programs to company goals.
“Asking open-ended questions that allow the CEO to coach and provide leadership is a great way to build a relationship,” says Stapp. “And also for the CMO to better understand what the CEO’s priorities are.”
Tactic #2. Pre-sell the decision makers
Most significant decisions about the marketing budget won’t be made during a budget meeting, says Franke James, editor and founder of Office-Politics.com. Those decisions will come in off-site clubs or homes, private offices, and in phone chats with people in power before the budget meeting.
You need to pre-sell decision makers on marketing initiatives you want to implement in the next budget cycle. Plant the seeds for your plans.
How to pre-sell decision makers:
1. Get input on key initiatives you’re planning
Round up input before a budget meeting to get an idea of what the objections or questions might be.
Try saying: “I’m thinking of doing this or that. What do you think?” or “I’m considering putting this before the budget board, but I’d really like to get your feedback on it before I present it.”
That opens the door for them to offer feedback, says James. Anticipating questions, especially objections, helps determine where you need to do more homework to fully develop a case for the initiatives you consider critical to your marketing plan’s success.
2. Sell your ideas
Explain to your colleagues how the marketing plan will bring the company closer to the company’s shared vision of success or business goals.
This involves strategic analysis. Ask yourself: How does my marketing plan get the company closer to that vision? Highlight those attributes of the plan.
NOTE: It is better to have a good understanding of the vision well in advance of budget planning, but this is not always the case. So, work with what you know about the intended direction of the company.
3. Identify your supporters in the company.
Have your supporters primed to defend you at the budget meeting by nurturing those relationships prior to the session.
Tactic #3. Arm yourself with metrics
Are you a marketer with Internet-driven campaigns and metrics that demonstrate ROI? Then it’s easy to make the argument that, if something is performing well, you allocate more dollars to it, says Stapp. And, if something is not performing well, you either take measures to improve it or you cut it.
Unfortunately, not all marketers have access to:
-cost per visit
-cost per click
-return on marketing dollars spent
-revenue for marketing dollars spent
And not all marketers have atomic-level detail of those numbers per marketing program, tactic, brand, set of brands, or vertical.
“When you get that kind of data, it’s fairly easy to defend your marketing plans and marketing spend,” says Stapp.
If you don’t have a set of metrics that demonstrate the ROI of particular tactics, you should build those into next year’s budget. Marketing is an investment. Its performance needs to be tracked. If you can’t prove marketing is doing its job, you certainly won’t be well armed to defend your budget.
Tactic #4. Do your research
Use research on various vendors and pricing to justify expenditures, she says.
Research what each program or line item might cost. Source the different vendors. Find the cheapest alternatives ahead of time, especially if you anticipate a budget cut in 2009.
One way to manage the workload is by tapping into existing expertise on staff, says Lisa Daichendt, a marketing consultant and Founder of Daimer Enterprises Inc. When heading corporate and franchise marketing for a cellular retailer, for example, Daichendt asked her print production manager to find the best printers or best methods for getting something printed inexpensively.
She would go to the print manager and say, “Here’s what we need to achieve. Here’s what I want it to look like. Here’s when I want it to go out. And here’s how much money we have for it.” And the print manager would tell her which printers or methods to use.
Daichendt also turned to her company’s webmaster for help with finding vendors to support important Web functions for marketing.
Tactic #5. Know your customer
Many companies still don’t have a good grasp of who their customers are, what they want, and what their pain points are.
You need to access third-party market research or market research conducted by your company when developing a defendable budget, says Daichendt. This information should guide all marketing efforts.
Useful links related to this article
Rethink Your Search Marketing Budget for ‘09: 5 Tactics to Defend Requests, Add Flexibility, Boost ROI:
SherpaBlog: Top Marketing Challenge for 2008 - Office Politics:
How Branded Cookies and Gas Card Giveaway Beat Budget Cuts: 6 Steps to 10% Lead Gen:
Overcoming Office Politics - 7 Strategies to Generate & Close More Leads:
Sales & Finance vs Marketing: 227 B-to-B Lead Generation Marketers on Office Politics (9 New Data Charts):
Six Scientifically Proven Ways to Succeed in Office Politics:
How to Get a Bigger Marketing Budget Approved: 5 Steps in 6 Months (Includes B-to-B Search Ad Tips):
How to get Your eBusiness and eMarketing Budget Approved By the CEO:
New Chart: Spending in Recessionary Economy: Travel, Contracts, Staff to Take Hits:
New Chart: Marketers Cutting Offline Tactics in Recessionary Economy:
New Chart: Two Shifts Speed Up in Bad Economy – From Offline and Brand to Online and Direct Tactics:
New Research from Sherpa: 1,763 Marketers Reveal Top Strategies for Email in Economic Downturn:
New Chart: Now is the Time to Invest in Email - Not Put It on the Chopping Block:
Loud Amplifier Marketing – Bryan Stapp’s consulting firm: