Early 2009 and you’re into managing your marketing budget for the year. The annual tug-of-war over a company’s marketing budget between the directors of the marketing department and the company’s Chief Financial Officer (CFO) was just a few months ago. Believe it or not, it’s time to start thinking about 2010.
With the downturn of the economy and no immediate positive forecasts, the 2010 budget tug-of-war is likely to get nasty… but it doesn’t have to be. As marketers, we’re trained to identify, target and speak in our customer’s own, unique language. I’ve found that CFO’s have their own language and if you’re willing to slip on a propeller hat and create a spreadsheet or two, your efforts will go a long way in getting your marketing budget approved.
I offer you five simple steps on how to get your marketing budget approved…and even speak to a CFO… if you really have to.
1. Marketing and Sales departments don’t “place nice” – be prepared: In most organizations, each department is focused on their own objectives and less interested in developing “the brand.” Often times, marketing and sales can lock horns with each other resulting in top management to make a choice. Awareness and management of this situation is the first step of getting your budget approved.
2. Ditch the marketing jargon and stop using the word “budget.” Company presidents and C-level executives rarely make it to the top via a marketing route. They don’t speak the marketing language. Smart marketers think of a marketing budget as an “investment,” while many company leaders think of marketing as an “expense.” For awhile, marketers were able to get what they wanted by simply switching these two words around – no more. The presidents and C-level executives have caught on. Today, the smart marketer should speak to CFO’s and company presidents as if we were managers of an investment portfolio.
Treat the term “budget” as a “loan.” CFO’s see the word “budget” and think money will be spent without any sign of returns. “Loan” implies the marketer will return the money with interest. Talk about your company’s marketing channels as different ways to make profits.
Stop using the term “ROI” and start using the term “profit.” Just like portfolio managers. C-level executives understand the word profit and all profit can be measured. Can all marketing ROI be measured? Likewise, stop using the word “cost” and start using the word “value.”
3. Become “metaphor-lingual” in business: Dropping the marketing jargon is step one in communicating (and convincing) the C-level budget slayers to stay away from your budget. When talking to the “propeller-wearing-spreadsheet-people,” use everyday metaphors to better explain marketing. Metaphor example: If you were working in oil or gas exploration and you just started drilling random holes, you’d probably be fired rather quickly. When deciding where to spend marketing dollars, the attitude from CFOs seems to be “let’s drill a few holes over here and a few here and hope it generates some response.” This of course, is the very definition of poor strategic planning for marketing. When speaking to non-marketers, learn to be “metaphor-lingual.”
4. Wrangle the ROI warfare and choose sides: C-level executives are often times obsessed with measuring ROI. When marketers can’t demonstrate or justify ROI, budgets get slashed. There are many ways to measure ROI in marketing, but unfortunately most of the metrics aren’t designed to co-exist. For example, direct marketing mailers focus on cost per sell. Media measurement is all about reach and frequency, while PR professionals are busy counting column inches and brand ROI is measuring brand preference. For large organizations, marketers need to create a ROI “dashboard” and keep all of the metrics in front of you, at all times. In smaller organizations, a marketer needs specific directions and buy-in surrounding the company’s business objectives. These business objectives must be supported from senior management and be measured by the appropriate ROI measurement method.
5. Adopt a culture of ROI measurement and build your plan. You’ve identify the challenges of working with multiple departments, you’ve ditched the marketing jargon, you’re using metaphors and you’ve selected the right ROI metric for your company. You’re well on your way to getting your budget approved. By taking the next 5 steps, you will accomplish three critical things: You’ll create a culture of ROI; you’ll be speaking to a CFO in a language he or she understands and most importantly, you’ll get your marketing budget approved!
1. Build the team – Unite departments, research and c-level management
2. Unify the ROI agenda – Agree to a strategy, set realistic goals and prioritize outcomes.
3. Establish metrics – Determine data sources, set goals and align budget with tasks
4. Communicate – brief agency partners, communicate to every employee and discuss metrics along the way
5. Adjust and review – Measure progress, review the processes and optimize performance and tactics during the process based on the numbers.
It is budget season planning time. Follow these steps and that marketing budget is yours.
About Darren Drewitz
Darren has 16 years of strategic and integrated marketing experience on both the client and agency sides. He has experience in both B2B and B2C marketing, including the multi-location, food, logistics, building & construction and tourism industries. Darren specializes in developing year-long strategic and integrated marketing plans designed to align business objectives with marketing initiatives. Darren lives in Austin, Texas with his wife Melissa and their two sons. Darren serves as an account director for MQ&C Advertising, a 25-year-old, full-service marketing and advertising agency.